Energy · Privatisation
Having sold three quarters of PIA in June, the government has moved on to the power sector. Three distribution companies are at an advanced stage of sale, with a commitment to the IMF to complete the process by early 2027.
The companies in question are IESCO, which supplies Islamabad and Rawalpindi, GEPCO in Gujranwala, and FESCO in Faisalabad. Between them they serve some of the most densely populated and industrially significant districts in the country, which is precisely why they were chosen: they are the distribution companies with the least catastrophic balance sheets, and therefore the ones a buyer might plausibly want.
That selection tells you something important about the exercise. This is not a wholesale restructuring of Pakistan’s power distribution network. It is the sale of the parts that can be sold, while the loss-making remainder stays where it is.
Why the government is doing this now
The immediate driver is the IMF programme. Privatising these three companies by early 2027 is a structural commitment, not an aspiration, and Pakistan’s record of missing such deadlines has consequences for the disbursement schedule that keeps the external account stable.
The underlying driver is older and more familiar. Pakistan’s distribution companies lose enormous quantities of electricity to theft, unbilled consumption and technical inefficiency, and those losses are ultimately absorbed by the state and passed to paying consumers through tariffs and surcharges. Every honest bill-payer in the country is subsidising a system that cannot collect from everyone it supplies.
The argument for privatisation is that a commercial owner has an incentive to fix that, where a state-owned utility answerable to political pressure does not. The argument against is that a commercial owner also has an incentive to disconnect non-paying consumers aggressively, raise tariffs where permitted, and invest only where returns justify it, and that those consequences fall on people who had no say in the sale.
What the PIA sale suggests
The airline sale completed on 29 June 2026, transferring 75% of PIA and ending more than two decades in which no major Pakistani state enterprise changed hands. It was, by the narrow measure of getting a transaction over the line, a success.
The aftermath has been less tidy. PIA still has no chief executive: Tewolde Gebremariam, the former Ethiopian Airlines chief the airline had lined up and whose appointment was reported as settled, took the top job at Air India instead. An airline weeks into new ownership without a chief executive is not a promising template for three utilities serving tens of millions of customers.
Selling the asset is the easy part. What follows, governance, leadership, regulation, is where privatisations are actually decided.
What changes for you
In the short term, very little. Tariffs are set by NEPRA rather than by the distribution company, and that regulatory structure survives a change of ownership. A privatised IESCO cannot simply decide to charge Islamabad more.
What does change is the operational posture. Private owners typically pursue recovery far more aggressively than state utilities, which have historically tolerated arrears in areas where enforcement was politically difficult. Expect faster disconnection for non-payment, harder enforcement against theft, and more investment in metering that makes both possible.
For households that pay on time, the medium-term prospect is genuinely better: reduced losses should, over years, take pressure off the surcharges that inflate everyone’s bill. For households and areas that have relied on informal tolerance, the adjustment will be abrupt.
Either way, the practical advice is the same as it has been. Know what you are being charged and check it, our guide to checking your electricity bill online across MEPCO, LESCO, IESCO and FESCO covers the mechanics, and it becomes more useful, not less, under a commercial owner.
The solar question sitting underneath all this
Privatisation is arriving at the same moment as a substantial shift in rooftop solar economics. The move from net metering to net billing cut the rate paid for exported solar power, and part of the rationale was that highly-compensated solar export was shifting costs onto grid-dependent consumers.
Those two policies point in the same direction. Both are attempts to stop the distribution network’s costs being socialised across a shrinking base of paying customers. Whether they succeed depends less on the ownership structure than on whether anyone can make collection work in areas where it never has.
What to watch
The meaningful signals over the next eighteen months are not the announcements but the mechanics: who actually bids, what price the assets fetch, what obligations the sale agreements impose on new owners regarding investment and service standards, and whether NEPRA is strengthened to regulate private monopolies rather than state ones.
A distribution company is a natural monopoly. Customers cannot switch supplier if service deteriorates. That makes the regulatory framework the entire safeguard, and it is the part of this process receiving the least public attention.
Common questions
Which electricity companies are being privatised?
IESCO, which serves Islamabad and Rawalpindi, GEPCO in Gujranwala, and FESCO in Faisalabad. The government is at an advanced stage on all three.
When will the sale be completed?
The commitment given to the IMF is to complete privatisation of the three companies by early 2027.
Will my electricity bill go up?
Tariffs are set by NEPRA, not by the distribution company, and that does not change with ownership. What changes is enforcement: private owners typically pursue arrears and theft far more aggressively.
Why these three companies specifically?
They are among the better-performing distribution companies, with losses low enough to make them saleable. The weaker DISCOs are not part of this round.
What happened with the PIA privatisation?
The government sold 75% of PIA on 29 June 2026, Pakistan’s first major privatisation in more than two decades. The airline has since been without a chief executive after its intended appointee took a role at Air India.
Can a private owner cut off my supply more easily?
Enforcement rules still apply, but private operators generally act on non-payment faster than state utilities have historically done. Households carrying arrears should expect less tolerance.
Does this affect solar net metering?
Not directly. The shift from net metering to net billing was a separate regulatory decision, though both policies address the same underlying problem of distribution costs falling on grid-dependent consumers.
