The Privatisation Commission (PC) board has proposed setting up a special purpose vehicle to strip selected liabilities and assets from three power distribution companies, following the same model used for Pakistan International Airlines.
SPV To Clean Balance Sheets
Positive Equity Push For FESCO, GEPCO, IESCO
The move aims to hand over Faisalabad Electric Supply Company (FESCO), Gujranwala Electric Power Company (GEPCO) and Islamabad Electric Supply Company (IESCO) with positive equity to private buyers.
Land assets and pensioners’ liabilities will be separated from the companies’ balance sheets and parked in a government-owned special purpose vehicle (SPV).
As of June 2025, the retired employees’ liabilities of the three DISCOs alone stood at Rs312 billion. This figure is expected to rise when balance sheets are split on the basis of audited results for March 2026.
Overall assets of the three companies totalled Rs1.2 trillion against liabilities of Rs1.05 trillion, leaving a net positive equity of Rs145 billion.
GEPCO, however, showed a negative equity of Rs14.4 billion at that time.
CCoP Approval Sought For Restructuring Plans
The PC board has recommended that the Cabinet Committee on Privatisation (CCoP) approve the restructuring plans and schemes of arrangement for the first batch of DISCOs.
These plans have been prepared on the basis of audited financial statements for the period ended March 31, 2026.
The framework is designed to maximise value for the government while keeping the transactions commercially viable and attractive for investors.
Investor Interest And IMF Commitment
In the PIA privatisation, the government had similarly carved out more than Rs650 billion in liabilities to present the airline with positive equity.
Strong interest has already been shown by both domestic and international investors.
Expressions of Interest deadlines are August 7 for FESCO, August 21 for GEPCO and September 7 for IESCO.
Pakistan remains committed to the International Monetary Fund to privatise at least three DISCOs, a pledge pending since 2013.
The latest IMF report noted delays due to investor concerns but said the government has now addressed them and expects finalisation by early 2027.
Next Steps In DISCO Privatisation
The proposed SPV structure is expected to improve the financial position of the selected power distribution companies, making them more attractive to investors while supporting the government’s broader privatisation agenda.