As the privatisation process for three power distribution companies moves forward, the government is expected to direct the Power Division to establish a new government-owned Special Purpose Vehicle with authorised share capital of Rs250 billion, according to well-informed sources in the Power Division who spoke to Business Recorder.
On July 28, 2026, the Privatisation Commission Board, in a meeting chaired by Muhammad Ali, Adviser to the Prime Minister on Privatisation and Commission Chairman, recommended that the Cabinet Committee on Privatisation approve restructuring plans and schemes of arrangement for the first batch of DISCOs: Faisalabad Electric Supply Company (FESCO), Gujranwala Electric Power Company (GEPCO), and Islamabad Electric Supply Company (IESCO).
Under the proposed structure, a government-owned SPV will be created to carve out selected assets and liabilities from the three companies, facilitating a more efficient and commercially viable transaction structure. According to sources, based on audited financial statements as of March 31, 2026, total assets to be transferred to the SPV amount to Rs350.6 billion, against total liabilities of Rs313 billion, leaving equity of Rs37.6 billion. The restructuring plans were prepared using those same audited financial statements, with the overall framework aimed at maximizing value for the government while keeping the transactions commercially viable and attractive to prospective private investors.
The Privatisation Commission Board was also briefed on strong interest from both domestic and international investors in the first batch of DISCO privatisations. Deadlines for submission of Expressions of Interest are set for August 7, 2026, for FESCO; August 21, 2026, for GEPCO; and September 7, 2026, for IESCO.
Sources said the government would direct NEPRA to register the SPV, along with a dedicated pension fund to be established for carved-out pension liabilities, under the NEPRA Act’s Registration Regulations 2022, including regulations 3 and 4 and the application prescribed in Schedule I, as well as the Registration Rules 2023, Rule 3. This registration would allow for the recoupment of retirees’ pension liabilities through tariffs. The government would also permit the lease of land, while the Securities and Exchange Commission of Pakistan would be asked to waive the applicable fee on the SPV’s authorized share capital for registration purposes.
“All relevant entities are to be directed to take necessary corporate actions to give effect to the restructuring plans, while relevant federal agencies and authorities will provide necessary consents, where required, to implement the restructuring plans and file the Schemes of Arrangements (SoAs),” the sources said.
The three DISCOs being privatized have also been instructed to complete the ongoing classification of their land holdings into core and non-core categories by the end of the current month.
Sources added that FESCO, GEPCO, and IESCO would each raise their authorized share capital to Rs100 billion, Rs75 billion, and Rs125 billion, respectively, bringing the combined authorized share capital to Rs300 billion. “The SECP will waive the applicable fee on the increase in authorized share capital of FESCO, GEPCO, and IESCO,” the sources added.
