Pakistan has shared details of its electricity distribution companies (DISCOs) privatisation programme with the International Monetary Fund (IMF). Both sides are reviewing progress on the country’s economic reform commitments. The talks focus on IESCO, FESCO and GEPCO, which make up the first batch of the current privatisation drive.
The process has moved forward. However, the timeline has shifted from earlier expectations. According to the latest IMF assessment, privatisation of Islamabad Electric Supply Company (IESCO), Faisalabad Electric Supply Company (FESCO) and Gujranwala Electric Power Company (GEPCO) is now expected to be finalised by early 2027. The delay is linked to investor concerns and market feedback.
Progress on IESCO, FESCO and GEPCO
The government has already invited investors to take part in the process. According to the Privatisation Commission, the proposed transaction could involve the sale of 51% to 100% shareholding, along with management control, in each DISCO.
Due diligence has also been completed. In addition, the relevant authorities have approved restructuring and transaction plans. This has allowed the process to move into its next stages.
The process has attracted investor interest as well. The Privatisation Commission reported that 10 parties had been pre-qualified for FESCO. Meanwhile, 11 expressions of interest or statements of qualification were under evaluation for GEPCO. The IESCO process had also advanced, with its EOI process completed in September.
Finance Minister Muhammad Aurangzeb also said recently that Turkish investors were showing interest in the privatisation of Pakistan’s electricity distribution companies.
What the IMF Timeline Shows
The IMF has linked private-sector participation in DISCO management with better efficiency, governance and power-sector finances. According to the Fund’s latest country report, the first batch was delayed after market-sounding exercises. However, investor concerns had been addressed, and Pakistan was moving ahead with the process.
At the same time, the government is preparing the second batch of DISCOs. HESCO and SEPCO are being prepared for private-sector participation. Outstanding subsidy claims, government balances and other balance-sheet matters are targeted for completion by the end of December 2026 under an IMF structural benchmark.
The government is also working on the remaining DISCOs. The aim is to prepare their financial positions for possible future private-sector participation.
Why DISCO Privatisation Matters
The DISCO reform is closely linked to Pakistan’s wider effort to reduce losses in the power sector. It also aims to control the buildup of circular debt.
According to the IMF, stronger private-sector management could improve operational performance and governance. It could also help address some of the financial pressures that contribute to circular debt.
For now, IESCO, FESCO and GEPCO are moving toward finalisation by early 2027. Meanwhile, preparations for HESCO and SEPCO are expected to continue through the end of 2026.
The next stages will depend on the transaction process, investor participation and completion of the required financial and restructuring measures.
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