Islamabad — Pakistan’s decision to privatise selected power distribution companies is being framed by policymakers as a long-term investment opportunity, with officials pointing to efficiency gains and operational reform rather than short-term profitability.
Sector assessments show that most DISCOs operate with high transmission and distribution losses, weak recovery ratios, and rising receivables — challenges that form the basis of the government’s case for private participation. Electricity demand, however, remains structurally strong, and tariffs are regulated by NEPRA, providing predictability once inefficiencies are addressed.
Officials involved in the process say investors are expected to focus on improving billing systems, strengthening governance, and modernising infrastructure. Even incremental reductions in losses and improvements in recovery can significantly improve financial performance under private management.
Audited financial statements indicate that receivables include not only consumer arrears but also unpaid government dues and tax-related claims, contributing to cash flow constraints across the sector.
The government maintains that privatisation will be carried out transparently and within a regulated framework, with the Power Division coordinating reforms and the Privatisation Commission overseeing transactions.
Analysts note that the diversity among DISCOs allows investors to select opportunities based on risk appetite, regional exposure, and operational expertise.
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