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LAHORE: A strong investor interest in the planned privatisation of three power distribution companies could translate into actual bids only if the government provides longer tariff guarantees, protection against regulatory reversals and greater freedom to operate in the electricity market.
The demands were highlighted in an investor feedback report prepared for the Privatisation Commission following roadshows held in Pakistan, Turkiye, Saudi Arabia and China in June and July for the proposed sale of Fesco, Gepco and Iesco. Potential investors warned that uncertainty on these fronts could undermine the planned privatisation.
The strongest demand was for a longer multi-year tariff (MYT) regime. Investors want the tariff control period extended to 7-10 years, saying the existing 5-year framework is too short to support investment in long-lived distribution assets.
They also want the uniform tariff system gradually replaced with tariffs linked to individual Disco performance and efficiency. Investors argue that the current arrangement can penalise better-performing companies and have sought incentives to reduce transmission and distribution losses and improve service reliability.
