Govt puts power, banking assets on the block

April 29, 2026 (MLN): Pakistan is set to accelerate its privatization drive as the Privatisation Commission of Pakistan prepares to invite expressions of interest (EOIs) next month for the sale of stakes in four major state-owned entities, officials familiar with the development said.

The move came as part of broader economic reforms aligned with commitments under the International Monetary Fund program, aimed at easing fiscal pressures and improving efficiency in loss-making public sector enterprises.

According to sources, the initial phase will include three power distribution companies, Islamabad Electric Supply Company, Gujranwala Electric Power Company, and Faisalabad Electric Supply Company, alongside the state-owned Zarai Taraqiati Bank Limited.

Investors will be invited to bid for strategic stakes as the government seeks to transfer management control and improve operational performance.

In the second phase, additional distribution companies, including Hyderabad Electric Supply Company and Sukkur Electric Power Company, are expected to be offered to investors.

Pakistan’s power sector remains a major fiscal burden, with annual subsidies surpassing PKR 1.2 trillion in FY2025.

Chronic inefficiencies, ranging from high transmission and distribution losses to widespread electricity theft, have kept aggregate losses near 20%, significantly undermining the financial sustainability of distribution companies.

As part of pre-privatisation restructuring, the government has overhauled governance frameworks within DISCOs, filling nearly 90% of board positions with private-sector professionals to enhance transparency, accountability, and efficiency.

Officials noted that Pakistan is actively courting foreign investors, particularly from the Middle East and Turkey, to participate in the bidding process and bring in capital, expertise, and improved management practices.

However, the privatization agenda is not without hurdles. Resistance from political stakeholders and labor unions, coupled with structural challenges in the power sector, may test the pace and execution of the divestment plan in the months ahead.

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