FESCO, GEPCO and IESCO Privatisation: Government Prepares PIA-Style Restructuring Model

The government has started preparations for restructuring and privatising three major electricity distribution companies — Faisalabad Electric Supply Company (FESCO), Gujranwala Electric Power Company (GEPCO), and Islamabad Electric Supply Company (IESCO) — using a model similar to the restructuring approach adopted for Pakistan International Airlines (PIA).

The proposed structure is aimed at separating selected assets and liabilities from the three DISCOs before the privatisation process moves into its next stages. According to the Privatisation Commission, the restructuring plans are based on the audited financial statements of FESCO, GEPCO and IESCO for the period ending March 31, 2026.

Government Plans Holding Structure to Prepare DISCOs for Privatisation

Under the proposed arrangement, selected assets and liabilities of FESCO, GEPCO and IESCO would be separated and placed into a government-owned Special Purpose Vehicle (SPV). The structure is intended to create a commercially viable transaction and make the three companies more attractive to potential private-sector investors.

The restructuring process is expected to focus on the following areas:

• Separation of selected assets and liabilities: Certain assets and obligations would be carved out from the DISCOs and transferred to the government-owned structure.
• Balance-sheet restructuring: The financial position of the three companies would be reorganised using their audited accounts as of March 31, 2026.
• Government-owned holding structure: The selected assets and liabilities would be placed under a dedicated SPV to simplify the eventual transaction.
• Preparation for private investment: The restructured DISCOs would be positioned for participation from local and international investors.
• Further privatisation steps: Once the restructuring and required approvals are completed, the government will proceed with the subsequent stages of the privatisation process.

The PIA-style approach is intended to address balance-sheet issues before the companies are offered to private investors. A similar strategy was used in the restructuring of PIA, where certain liabilities were separated to make the airline’s financial position more suitable for private-sector investment.

The Privatisation Commission has said that the proposed framework is designed to maximise value for the government while keeping the transactions commercially viable and attractive to prospective investors. The government has also reported strong interest from both domestic and international investors in the first batch of DISCOs.

The three companies collectively serve millions of electricity consumers across Punjab and the Islamabad region. The government’s broader objective is to increase private-sector participation, improve operational efficiency and strengthen service delivery in the power distribution sector.

The privatisation process is still subject to the required government approvals and transaction procedures. The IMF has indicated that the first batch of DISCO privatisation, including FESCO, GEPCO and IESCO, is moving forward with the aim of finalising the process by early 2027.