Privatisation • Energy • Punjab

Eleven Companies Just Bid to Buy the Power Company That Sends You a Bill Every Month

A Saudi, three Turkish, and seven of Pakistan’s biggest business groups are now in the race for GEPCO. Here is what they want, who is actually in the running, and what it means for the 3.9 million people who get a bill from them every month.

Eleven companies — three Turkish, one Saudi, and seven of Pakistan’s largest business groups — submitted qualifying bids on Friday for the Gujranwala Electric Power Company, the state-owned distributor that sends an electricity bill to roughly 3.9 million homes, shops, farms, and factories across six districts of north Punjab. The Privatisation Commission is now preparing to shortlist the candidates and give them access to the company’s books, in what is the most consequential change to Pakistan’s electricity distribution sector in two decades.

Who is actually bidding

The list of eleven bidders, published on Friday by the Privatisation Commission, contains some of the largest names in Pakistani industry and three foreign companies with track records in regional power distribution. The seven local bidders are: Engro Energy Limited (part of the Dawood Group), Sapphire Fibers Limited (the Abdullah family’s textile and power group), Hub Power Holdings and Lucky Cement (the Habibullah Khan family’s power company paired with one of the country’s largest cement makers), Shirazi Investments (the conglomerate with stakes in automobiles and power), Artistic Milliners and Fatima Group (the Yaqoob family’s textile operation paired with the new owners of Pakistan International Airlines), K-Electric Limited (the country’s largest integrated private power company, currently supplying Karachi), and the consortium of AKD Securities, Fast Cables, and Mughal Steel Group.

The four foreign bidders are: Al Sharif Contracting and Commercial Development Company of Saudi Arabia, and three Turkish power companies — Aktor Elektrik Enerji Yatırımları, Genvera Enerji, and Cengiz Enerji Sanayii ve Ticaret. All three Turkish companies have also bid for FESCO, the Faisalabad Electric Supply Company, whose EOI deadline closed on 7 August. The Privatisation Commission says that under the new rules, a bidder that is technically and financially qualified for one distribution company can place an offer for the other two, which is why several of the same names keep appearing on both lists.

The total pool is smaller than it looks. The Privatisation Commission’s own statement noted that, of the eleven EOIs for GEPCO, only one new local and one new foreign consortium submitted on Friday — the remaining nine were already in the race for FESCO. The end-of-Friday deadline produced less fresh competition than the headline number suggests, but the absolute number of interested parties is still the highest in any recent privatisation round.

What GEPCO actually does

GEPCO is the fifth-largest electricity distribution company in Pakistan by number of consumers. It serves six districts of north Punjab — Gujranwala, Sialkot, Gujrat, Narowal, Hafizabad, and Mandi Bahauddin — running 132 kV and 66 kV sub-transmission lines, hundreds of grid substations, and 11 kV and 400 V low-tension distribution feeders that ultimately reach every household, shop, farm, and factory in the region. It is headquartered in Gujranwala and operates through five circles, each covering a district cluster.

The economic geography of GEPCO’s territory is unusual. Gujranwala is one of Pakistan’s largest industrial cities, with steel, ceramics, electronics, and food processing as the main industries. Sialkot is the world capital of surgical-instrument manufacturing, and also produces sports goods and leather. Gujrat and Mandi Bahauddin are smaller industrial cities with fan, furniture, and appliance manufacturing. Narowal and Hafizabad are predominantly agricultural, with rice, wheat, and kinnow as the main crops. The mix means GEPCO’s load curve is heavier on industrial demand than most DISCOs, and its peak summer load is among the highest per consumer in the country.

Why this privatisation is happening now

The push to privatise the power distribution companies is the second attempt in fifteen years. The first round, in 2008 to 2016, stalled after the PML-N government suspended the process in 2014. The current round, which began in late 2024, is the first time all ten ex-WAPDA DISCOs and K-Electric’s older sibling have been put on a single, sequenced privatisation track. The argument from the federal government, supported by the IMF, is that the DISCOs are running chronic losses, that their recovery rates are too low, and that private management can lift both. The argument from the opposition parties and the consumer-rights groups is that previous attempts at privatisation in the power sector — most notably K-Electric in Karachi — have not delivered cheaper bills or better service, and that the new owners will be more interested in recovering their purchase price than in investing in the network.

GEPCO is, by the standards of the DISCO sector, one of the better-run companies. Its billing recovery rate is higher than the average for the sector, and its technical losses are below average. That is part of why it has attracted the highest number of qualified bidders of any of the three companies being privatised in this batch. The other two — FESCO, which received twelve EOIs by its 7 August deadline, and IESCO, whose EOI deadline is 7 September — are also above-average performers, which suggests that the government’s decision to start with the best-run companies is a deliberate signal to the market.

What the buyer actually gets

The transaction structure is straightforward on paper. The buyer will acquire between 51% and 100% of GEPCO’s shares, along with management control. The transaction will be settled through a competitive bidding process after the pre-qualification stage. The buyer will take over the existing distribution network, the existing workforce, the existing consumer base, and the existing revenue stack, and will inherit the existing liabilities to power generation companies and the central grid.

What the buyer does not get is the right to set the consumer tariff. The tariff that GEPCO charges its 3.9 million consumers is determined by NEPRA, the National Electric Power Regulatory Authority, in a formal hearing process. The distribution margin that the buyer is allowed to earn is also determined by NEPRA, on a multi-year basis. The buyer can reduce its costs, increase its billing recovery rate, and invest in the network to reduce technical losses — all of which flow through to higher profit. But the buyer cannot, on its own, raise the per-unit price on a consumer’s bill. The tariff is the regulator’s call, not the company’s.

What changes for the consumer

The honest answer is: probably not much in the first year, and possibly a lot in the second and third. The reason is that the new owner’s biggest lever is the billing recovery rate — the percentage of bills that are actually paid — and the only way to raise that is to invest in the network, in meter reading, and in disconnections of non-payers. That takes time, and the gains show up in reduced line losses rather than in lower consumer tariffs.

The historical record on K-Electric, which has been privately run since 2005, is mixed. K-Electric’s billing recovery rate has improved significantly over the last decade, and its technical losses have fallen. But the consumer tariff in Karachi has not fallen; if anything, it has risen faster than in the rest of the country, because K-Electric has been more aggressive in passing through fuel-cost adjustments to consumers and in requesting NEPRA tariff increases. The lesson from Karachi is that private management can make a distribution company more efficient, but it does not necessarily make electricity cheaper for the end consumer.

The new owner of GEPCO will inherit the network, the workforce, and the consumer base. It will not inherit the right to set your bill. The tariff will still be set by NEPRA, the regulator, after a public hearing. The structure of the privatisation, as set out by the Privatisation Commission

The next six months

The pre-qualification process will run over the next four to six weeks. The eleven bidders will be evaluated against the approved pre-qualification criteria, which include financial strength, technical experience in power distribution, and compliance with anti-corruption and tax rules. The successful applicants will then be invited to the next stage of the transaction, where they will be granted access to the Virtual Data Room (VDR) and will be able to undertake detailed buy-side due diligence on GEPCO’s books.

The financial bid is expected by the end of the calendar year, and the privatisation is likely to close in the first or second quarter of 2027. The new owner will then take over management of GEPCO. The consumers in Gujranwala, Sialkot, Gujrat, Narowal, Hafizabad, and Mandi Bahauddin will see a new logo on their bills, but they will not see a new tariff until NEPRA’s next multi-year tariff determination, which is expected in mid-2027.

The other two DISCOs in the same batch — FESCO and IESCO — are on a similar timeline, with IESCO’s EOI deadline closing on 7 September. The federal government’s stated plan is to privatise all ten DISCOs over the next three years. If GEPCO is a clean, well-run sale, it will set a template for the rest. If it stalls — as the 2008 to 2016 round did — it will be a setback for the entire reform programme.