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Islamabad:Pakistan’s electricity distribution sector requires governance reforms, regulatory certainty and a consumer-centric approach to ensure the success of the ongoing privatisation efforts as privatisation alone cannot address the sector’s structural challenges and instead, its success will depend on effective regulation, strong institutional capacity and robust accountability mechanisms safeguarding consumer interests.
This was the crux of the thoughts shared by experts during a roundtable session, titled “Reimagining Pakistan’s Distribution Sector: Privatisation, Solarisation and Circular Debt,” here at the Institute of Policy Studies (IPS) on Monday.
IPS chairman Khalid Rahman observed that Pakistan’s electricity distribution sector was at a critical juncture where reforms were essential and that no single governance model offered a universal solution.
He emphasised that the ongoing privatisation of Iesco, Gepco and Fesco should ultimately be assessed through the lens of consumer welfare, effective regulation and improved service delivery.
Senior researcher Afia Malik argued that privatisation was neither a necessary nor a sufficient condition for improving DISCOs’ performance. Drawing on international experience, she said better governance, professional management, independent boards, regulatory certainty and operational autonomy were more important than ownership alone. The researcher said even publicly owned DISCOs could perform efficiently when these fundamentals were in place.
Iesco Chief Engineer (O&M) Muhammad Asim Ejaz outlined the government’s privatisation process for DISCOs and said international consultants had conducted feasibility assessments and identified operational gaps prior to the issuance of expressions of interest by the Privatisation Commission. He said privatisation had produced mixed outcomes globally and should therefore be judged by its implementation rather than the concept itself.
NEPRA Director General (Licensing) Imtiaz Hussain Baloch declared DISCOs’ privatisation a step in the right direction, citing K-Electric’s improvements in reducing losses, strengthening regulatory compliance and enhancing service delivery.
He noted that K-Electric consistently ranked among the best-performing utilities in the regulator's evaluations. He pointed out that Pakistan had long delayed reforms for public distribution companies.
Convener of the FPCCI Energy Advisory Committee Rehan Javed called for stronger legal measures against power theft. NUST USPCAS-E head of department Dr Ali Abbas Kazmi questioned the rationale for privatising the country’s best-performing DISCOs, saying comparable efficiency gains could be achieved under public ownership through better management.
He warned that privatisation could have implications for consumer tariffs and labor unions. LUMS Energy Institute director Dr Naveed Arshad said rapid behind-the-meter solar adoption was accelerating grid defection, particularly among high-paying consumers and that it posed a serious financial challenge for power companies.
Senior economist Shahid Mehmood said governance, not privatisation itself, should remain the focus of reforms. He argued that the success of privatisation depended on its design and ability to improve consumer welfare.
Energy expert Yasir Hussain said Pakistan’s regulatory and institutional environment must attract capable investors and ensure measurable improvements in service delivery. IPS Associate Ammar Yasir emphasised that privatisation should not become an end in itself but should instead be pursued only if it strengthened governance and improved services for consumers.
