The Cabinet Committee on Privatisation (CCoP) has approved the restructuring plan for the first batch of three electricity distribution companies, Faisalabad Electric Supply Company (FESCO), Gujranwala Electric Power Company (GEPCO) and Islamabad Electric Supply Company (IESCO).
The decision is part of the government’s broader power sector reform agenda aimed at making distribution companies financially sustainable, professionally managed and digitally enabled while improving electricity services for households, businesses and industrial consumers.
Under the approved plan, selected assets, including all land parcels, will be transferred to a government-owned special purpose vehicle. Selected liabilities, including post-retirement benefits of employees who have already retired, will also be moved to the SPV along with a material amount of funds.
Retirement benefits for current employees will remain with the respective DISCOs. Intergovernmental receivables and payables will also be netted off as part of the restructuring process to settle government receivables.
According to the Privatisation Commission, the restructuring plan is fiscally neutral and has been designed to enhance value for the government while ensuring that the transaction remains viable. The government said service continuity would remain a priority throughout the process and employee interests would be addressed in accordance with applicable laws and transaction arrangements.
Advisor to the Prime Minister on Privatisation Muhammad Ali said consumers would remain protected under Pakistan’s regulatory framework. He added that electricity tariffs would continue to be determined through the applicable National Electric Power Regulatory Authority process and notified by the government, while the reforms would focus on improving reliability, efficiency and customer service.
FESCO, GEPCO and IESCO collectively serve more than 14 million consumers across major industrial, commercial and urban centers. The government said improving their performance would be important for reducing power tariffs and supporting more competitive electricity services for Pakistan’s economy.
The approval marks the government’s latest move to address legacy issues in the power distribution sector and establish modern, accountable and consumer-focused distribution companies as part of its broader privatization and power sector reform efforts.
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