Government Opens Sale of FESCO, GEPCO and IESCO — Pakistan's Largest Power Privatisation in 30 Years

The Privatisation Commission on May 19 invited expressions of interest (EOIs) from local and international investors for the partial or full sale of Faisalabad Electric Supply Company (FESCO), Gujranwala Electric Power Company (GEPCO), and Islamabad Electric Supply Company (IESCO) — collectively serving more than 14 million Pakistani consumers and the largest power-sector divestment Pakistan has attempted in three decades.

What is being sold

Investors can acquire between 51% and 100% shareholding plus management control in each of the three Discos individually. The deadline for EOI submissions falls in the first quarter of FY2027, with the Privatisation Commission promising "a transparent, competitive and investor-friendly" process aligned with international best practices.

The three companies are the most viable of the 11 Discos carved out of the Water and Power Development Authority (WAPDA) in 1998. They cover key economic corridors of Punjab, the Islamabad region, and parts of Azad Jammu and Kashmir.

Why these three first

• FESCO — serves Faisalabad's industrial belt and surrounding districts, with consistently lower transmission and distribution (T&D) losses than the national average.
• GEPCO — serves Gujranwala, Sialkot, and the broader north-Punjab industrial cluster, historically the second-most efficient Disco after FESCO.
• IESCO — serves the federal capital and Rawalpindi, with the country's highest commercial and government consumer base and the lowest bill-recovery risk.

These three combined have lower aggregate T&D losses (~10–12%) than peers like HESCO and SEPCO (which sit above 30%), making them the only Discos commercially attractive to private buyers without first absorbing the rest of the loss burden.

The 30-year backstory

The original plan in 1998 was to complete Disco privatisation within five years. It never happened — successive governments diluted the mandate under union pressure, political resistance from constituencies dependent on subsidised power, and the absence of a credible regulatory ringfence to prevent post-sale tariff disputes.

The current push is driven by IMF programme conditions and the broader fiscal logic that Pakistan can no longer afford to absorb circular debt from underperforming Discos that grew past Rs. 2.4 trillion in early 2026.

What investors will weigh

The three Discos are profitable on paper, but the sale will turn on three open questions: how the National Electric Power Regulatory Authority (NEPRA) handles tariff petitions post-sale; how the cross-subsidy regime — currently used to keep K-Electric and Disco tariffs broadly aligned — is unwound; and whether the federal government will indemnify acquirers against legacy circular-debt exposure.