The World Bank has proposed that the ownership of 10 power distribution companies (DISCOs) in Pakistan be transferred to the president before they are privatised.
During a Senate Standing Committee on Privatisation meeting, Power Division officials revealed that the World Bank has set out at least nine conditions for the privatisation of DISCOs, with only two of these conditions met so far.
The conditions include establishing tariff rules, clarifying subsidies, and revising eligibility criteria for licenses. The World Bank also stressed the importance of cleaning up DISCOs’ balance sheets, recognising liabilities, and implementing a clear electricity policy that outlines roles and responsibilities to reduce both technical and commercial losses.
Officials are hopeful that the remaining seven conditions will be fulfilled by January 2025. The World Bank’s support for the privatisation is part of its Non-Lending Technical Assistance programme.
However, Federal Minister for Privatisation, Abdul Aleem Khan, emphasised that unresolved legacy issues and off-balance sheet liabilities must be addressed before proceeding.
The Power Division’s additional secretary also stated that the government’s uniform tariff policy will remain in place even after the privatisation, meaning consumers in more efficient regions like Punjab will continue to subsidise those in areas with higher line losses, such as Sindh and Balochistan. Additionally, the government will maintain subsidies for the privatised companies, putting further strain on the budget.
In August, the cabinet approved a phased privatisation plan for DISCOs. The first phase will see profitable companies, such as Islamabad Electric Supply Company (IESCO), Faisalabad Electric Supply Company (FESCO), and Gujranwala Electric Power Company (GEPCO), sold outright. The second phase will involve loss-making entities like Lahore Electric Supply Company (LESCO), Multan Electric Power Company (MEPCO), and Hazara Electric Supply Company. The most loss-making companies, including Hyderabad and Peshawar DISCOs, will be offered under long-term concession agreements.
