Government plans to transfer selected assets and liabilities to a state-owned SPV as part of wider power-sector reforms.
ISLAMABAD: The Cabinet Committee on Privatisation (CCoP) has approved a restructuring plan for the first batch of electricity distribution companies, comprising Faisalabad Electric Supply Company (FESCO), Gujranwala Electric Power Company (GEPCO) and Islamabad Electric Supply Company (IESCO).
The decision was taken at a meeting chaired by Deputy Prime Minister Senator Mohammad Ishaq Dar, according to a statement issued by the Privatisation Commission on Monday.
The approval marks a key step in the government’s broader power-sector reform programme, which aims to establish financially sustainable, professionally managed and digitally enabled distribution companies while improving services for households, businesses and industrial consumers.
Selected assets to be transferred to government SPV
Under the approved restructuring plan, selected assets of the three DISCOs, including all land parcels, will be carved out and transferred to a Special Purpose Vehicle (SPV) owned by the Government of Pakistan.
Selected liabilities will also be transferred to the government-owned SPV. These include post-retirement benefits of employees who have already retired, along with the relevant fund.
However, retirement benefits of existing employees will remain with their respective distribution companies.
The restructuring plan also provides for the netting off of inter-governmental receivables and payables to settle receivables owed to the Government of Pakistan.
Restructuring aimed at fiscal neutrality
According to the Privatisation Commission, the restructuring has been designed to remain fiscally neutral, while enhancing value for the Government of Pakistan and ensuring the viability of the proposed transaction.
The government said consumers, employees, businesses and local communities all have a direct stake in the reform process.
It stressed that continuity of electricity services would remain a priority throughout the restructuring.
Employee interests will be addressed under applicable laws and transaction arrangements, while relevant stakeholders will be kept informed as the reform programme progresses.
Electricity tariffs to remain under NEPRA framework
Prime Minister’s Adviser on Privatisation Muhammad Ali said consumers would remain protected under the existing regulatory framework.
“Consumers will remain protected under Pakistan’s regulatory framework,” he said, adding that electricity tariffs would continue to be determined through the applicable National Electric Power Regulatory Authority (NEPRA) process and subsequently notified by the government.
He said the reform programme would focus on achieving measurable improvements in electricity reliability, operational efficiency and customer service.
Three DISCOs serve over 14 million consumers
FESCO, GEPCO and IESCO collectively provide electricity services to more than 14 million consumers across major industrial, commercial and urban centres.
The government considers improving the performance of the three distribution companies critical to reducing electricity costs and strengthening Pakistan’s economic competitiveness.
The approval of the restructuring plan marks a significant step towards addressing longstanding structural constraints in the power distribution sector.
The government aims to use the restructuring process to establish more modern, accountable and consumer-focused electricity distribution companies while creating a stronger foundation for broader power-sector reforms.