MUSHTAQ GHUMMAN

ISLAMABAD: As the privatisation process of three power distribution companies (Discos) moves forward, the government is likely to direct the Power Division to establish a new government-owned Special Purpose Vehicle (SPV) with authorised share capital of Rs250 billion, well-informed sources in the Power Division told Business Recorder.

On July 28, 2026, the Privatisation Commission (PC) Board, in a meeting chaired by Muhammad Ali, Adviser to the Prime Minister on Privatisation and Chairman of the Privatisation Commission, recommended that the Cabinet Committee on Privatisation (CCoP) approve the 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 established to carve out selected assets and liabilities of the three Discos, thereby facilitating an efficient and commercially viable transaction structure.

According to sources, based on audited financial statements for the period ended 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 and schemes of arrangement have been prepared on the basis of the audited financial statements of the three Discos for the period ended March 31, 2026. The proposed framework is aimed at maximising value for the Government of Pakistan while ensuring that the transactions remain commercially viable and attractive to prospective private-sector investors.

The PC Board was also apprised of strong interest from both domestic and international investors in the privatisation of the first batch of Discos. The deadlines for submission of Expressions of Interest (EOIs) are 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 and the pension fund to be established for carved-out pension liabilities under the Nepra Act, Registration Regulations 2022, including regulations 3 and 4 and the application prescribed in Schedule-I, as well as Registration Rules 2023, Rule 3.

The registration would facilitate relevant recoupment of retirees’ pension liabilities through tariff. The government would also allow the lease of land, while the Securities and Exchange Commission of Pakistan (SECP) would be requested to waive the applicable fee on the authorised share capital for registration of the SPV.

“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 privatised have also been directed to complete the ongoing classification of land under their use into core and non-core categories by the end of the current month.

Sources said FESCO, GEPCO and IESCO would increase their authorised share capital to Rs100 billion, Rs75 billion and Rs125 billion, respectively, taking the combined authorised share capital to Rs300 billion.

“The SECP will waive the applicable fee on the increase in authorised share capital of FESCO, GEPCO and IESCO,” the sources added.