Ten Investors Enter Race for IESCO as Pakistan Advances $-Style DISCO Privatisation Drive

ISLAMABAD: Pakistan’s privatisation of Islamabad Electric Supply Company (IESCO) has entered a new phase with 10 domestic and international investor groups submitting Expressions of Interest (EOIs) for stakes ranging from 51% to 100% along with management control, intensifying competition for one of the country’s key electricity distribution companies.

The Privatisation Commission (PC) received the 10 EOIs on Monday, marking a significant step in the government’s plan to bring private-sector management into IESCO as part of the first batch of distribution company (DISCO) reforms.

The investor interest includes three Turkish energy companies and several major Pakistani business groups and corporate entities, highlighting participation from both domestic and international investors in the proposed transaction.

The three Turkish companies participating in the process are Aktor Elektrik Enerji Yatırımları San. ve Tic. A.Ş., Genvera Enerji A.Ş. and Cengiz Enerji Sanayii ve Ticaret A.Ş.

Among the Pakistani participants, Engro Energy Limited has submitted an EOI, while an Artistic Milliners-led consortium includes The Lake City Holdings, Fatima Capital Limited, Din Ventures (Pvt) Limited and Fazal Cloth Mills Limited.

A Hub Power Holding Limited-led consortium, comprising Lucky Cement Limited, Kohat Cement Limited and Metro Ventures (Private) Limited, has also submitted an EOI for a stake and management control of IESCO.

Other prospective investors include Sapphire Fibers Limited, Novatex Limited and Bestway Cement Limited.

A consortium led by Hasnaat Brothers Construction Co. (Pvt) Limited, comprising Dhilal Holding Group, Pak Steel, Bio-Labs (Pvt) Limited and Farid Steel Casting (Pvt) Limited, is also participating in the privatisation process.

According to the Privatisation Commission, prospective investors are seeking to acquire between 51% and 100% of IESCO’s shareholding along with management control, putting the transaction at the centre of the government’s strategy to introduce private-sector management into the power distribution business.

The development follows domestic and international roadshows conducted by the government to attract potential investors and market the transaction to both local and international business groups.

Adviser to the Prime Minister on Privatisation and Chairman of the Privatisation Commission Muhammad Ali described the investor response as an important milestone in the government’s DISCO privatisation programme.

He said the participation reflected investor confidence in the potential of Pakistan’s electricity distribution sector and the government’s commitment to maintaining a transparent, competitive and professionally managed transaction process.

The latest development does not, however, represent completion of the privatisation process. The Privatisation Commission will first evaluate the EOIs and Statements of Qualification (SOQs) submitted by the interested parties against the approved prequalification criteria.

Only applicants meeting the prescribed requirements will be prequalified and invited to proceed to the next stage.

Prequalified investors will subsequently receive access to IESCO’s Virtual Data Room (VDR), allowing them to conduct detailed buy-side due diligence on the company. The due-diligence phase will enable prospective investors to examine the company’s operational, financial and commercial position before the transaction advances to subsequent stages.

The Privatisation Commission said it would engage with prequalified investors throughout the due-diligence process and seek alignment on an equitable, transparent and predictable post-privatisation regime.

The government has positioned the IESCO transaction as part of a wider effort to improve the financial and operational performance of Pakistan’s electricity distribution sector.

The proposed transaction is intended to improve operational efficiency, modernise distribution infrastructure, strengthen customer services and reduce distribution losses, according to the Privatisation Commission.

For the power sector, reducing distribution losses is particularly significant because inefficiencies at the distribution level contribute to financial pressures across the electricity supply chain. The government expects improved commercial discipline and investment in distribution infrastructure to strengthen the financial sustainability of the sector.

The government has also linked the DISCO reform programme with its longer-term objective of improving the reliability and affordability of electricity for consumers.

IESCO is among three distribution companies included in Batch-I of the government’s DISCO privatisation programme, alongside Faisalabad Electric Supply Company (FESCO) and Gujranwala Electric Power Company (GEPCO).

Investor participation has also been reported in the other two transactions. The Privatisation Commission said 10 parties had already been prequalified for FESCO, while 11 EOIs had been received for GEPCO and were under evaluation for prequalification.

The IESCO process will now move from the initial expression-of-interest stage towards scrutiny and prequalification. Successful investors will then undertake detailed due diligence before the government proceeds with subsequent stages of the transaction.

The strong participation of Turkish companies alongside major Pakistani corporate groups also gives the IESCO transaction an international dimension, as the government seeks private capital, management expertise and investment for the modernisation of Pakistan’s electricity distribution infrastructure.

For investors, the transaction offers potential exposure to a major electricity distribution business serving the federal capital and adjoining areas, while for the government, the process forms part of a broader attempt to restructure the financially pressured DISCO sector through private-sector participation and stronger commercial management.