Government Plans Rs250bn SPV to Facilitate Privatisation of Three DISCOs
ISLAMABAD: The government is set to establish a new government-owned Special Purpose Vehicle (SPV) with an authorised share capital of Rs250 billion to facilitate the privatisation of three power distribution companies (DISCOs), according to sources in the Power Division.
The proposed SPV will support the restructuring and privatisation of Faisalabad Electric Supply Company (FESCO), Gujranwala Electric Power Company (GEPCO) and Islamabad Electric Supply Company (IESCO).
The Privatisation Commission (PC) Board, at its July 28, 2026 meeting chaired by Adviser to the Prime Minister on Privatisation and PC Chairman Muhammad Ali, recommended that the Cabinet Committee on Privatisation (CCoP) approve the restructuring plans and schemes of arrangement for the three DISCOs.
Under the proposed arrangement, selected assets and liabilities of the three companies will be transferred to the government-owned SPV to create a commercially viable structure for the privatisation process.
Based on audited financial statements for the period ended March 31, 2026, the assets proposed for transfer to the SPV are valued at approximately Rs350.6 billion, while liabilities stand at around Rs313 billion, leaving equity of Rs37.6 billion.
The restructuring framework is intended to maximise value for the government while ensuring that the transactions remain commercially attractive to potential private-sector investors.
The PC Board was also informed of significant interest from both domestic and international investors in the first batch of DISCOs. The deadlines for submission of Expressions of Interest (EOIs) are August 7 for FESCO, August 21 for GEPCO and September 7 for IESCO.
Sources said the government would direct NEPRA to register the SPV as well as a pension fund for carved-out pension liabilities under the applicable regulatory framework. The registration is expected to facilitate the recovery of retirees’ pension liabilities through electricity tariffs.
The government is also expected to permit the leasing of land, while the Securities and Exchange Commission of Pakistan (SECP) would be requested to waive applicable fees related to the SPV’s authorised share capital.
All relevant entities will be directed to undertake the necessary corporate actions to implement the restructuring plans, while federal agencies and authorities will provide required approvals and consents for filing the Schemes of Arrangement.
Meanwhile, FESCO, GEPCO and IESCO have been instructed to complete the classification of land under their use into core and non-core categories by the end of August.
As part of the restructuring, the three DISCOs will also increase their authorised share capital. FESCO’s will rise to Rs100 billion, GEPCO’s to Rs75 billion, and IESCO’s to Rs125 billion, bringing their combined authorised share capital to Rs300 billion.
The SECP is expected to waive the applicable fees on these increases, according to sources.
Story by Mushtaq Ghumman
