By Staff Reporter
ISLAMABAD: Pakistan’s privatization drive for its state-owned power distribution companies cleared its first major hurdle, with the government reporting a dozen expressions of interest from investors seeking to take control of Faisalabad Electric Supply Co., one of three regional utilities up for sale in the country’s most ambitious power-sector overhaul in decades.
The Privatisation Commission said Friday it received bids from three Turkish firms, one Chinese company and eight Pakistani conglomerates, all vying for stakes ranging from 51% to full ownership of Fesco, along with management control of the utility.
The response marks a milestone for Islamabad’s push to offload loss-making electricity distributors that have long strained public finances and contributed to chronic power shortages across the South Asian nation of more than 240 million people.
“The strong response to Fesco reflects investor confidence in the potential of Pakistan’s electricity distribution sector and in the government’s commitment to a transparent, competitive and professionally managed process,” Muhammad Ali, the commission’s chairman and adviser to the prime minister on privatization, said in the statement.
Turkish interest came from Aktor Elektrik Enerji Yatırımları San. ve Tic. A.Ş., Genvera Enerji A.Ş., part of the Celik Group, and Cengiz Enerji Sanayii ve Ticaret A.Ş. Jiangxi Electric Power Construction Co. submitted the sole bid from China, a country that has poured billions of dollars into Pakistani energy infrastructure under the China-Pakistan Economic Corridor.
The domestic contenders represent some of Pakistan’s largest business houses. They include Engro Energy Ltd., Hub Power Holdings, Lucky Cement Ltd. and Nishat Mills Ltd., alongside Sapphire Fibers Ltd., Shirazi Investments (Pvt) Ltd. of the Atlas Group, and a joint bid from Maple Leaf Cement and Kohinoor Textile Mills. Pak Elektron Ltd. teamed up with Nishat Mills, while Artistic Milliners (Private) Ltd. paired with K-Electric Ltd., the utility that already supplies power to Karachi under private ownership.
Ali said the commission would now move to evaluate the bids against prequalification criteria before granting successful applicants access to a virtual data room for due diligence. He added that officials looked forward to “engaging constructively with the prequalified investors” on the structure of the sector once privatization is complete.
Fesco is one of three distribution companies, known as Discos, that Islamabad has bundled into its first privatization batch, alongside Gujranwala Electric Power Co. and Islamabad Electric Supply Co. The trio are widely regarded as the most commercially viable of the 11 regional utilities that emerged from the breakup of the state-run Water and Power Development Authority in 1998.
Bid deadlines for the other two utilities fall later this year, with expressions of interest for Gepco due Aug. 21 and for Iesco on Sept. 7.
Pakistan’s power distribution network has been a persistent drag on the economy, plagued by transmission losses, unpaid bills and aging infrastructure that have forced successive governments to funnel subsidies into the sector. The circular debt crisis — unpaid obligations that ripple through generators, fuel suppliers and distributors — has repeatedly threatened to derail the country’s finances and complicated talks with the International Monetary Fund.
Ali said privatizing the Discos was intended to improve operational efficiency, modernize aging infrastructure, strengthen customer service and reduce losses across the network. “Over time, these measures will help create the conditions for more competitive electricity distribution and affordable, reliable power for consumers,” he said.
The commission said the process would remain open and competitive, describing the sale as part of the federal government’s broader effort to reform a power sector that has struggled to keep pace with demand while remaining financially sound.
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