ISLAMABAD: The Financial Advisors (FAs) have briefed the Power Division and Privatisation Commission on private sector participation in three power Distribution Companies (Discos), sources told Business Recorder.
The government is making efforts to privatize three Discos, Islamabad Electric Supply Company (IESCO) Gujranwala Electric Power Company (GEPCO) and Faisalabad Electric Supply Company (FESCO).
“The discussion was on conditions precedent and regulatory changes we need to complete before DISCOs are ready for privatisation. Also on cleaning up DISCOs’ balance sheets and preparations required for DISCOs privatisation,” said an official who attended the meeting.
Discos’ sell-off: PC inks FASA with A&M-led Consortium
The FA Consortium led by Alvarez &Marsal Middle East Limited is working on a mechanism to clean balance sheets of Discos. I guess over Rs 700 billion on Discos books is on behalf of PHL.
“FA made a presentation on key highlights/ findings of global experience, sector level due diligence and market sounding reports which were required to be submitted as deliverables for phase-1 of Terms of References,” the source said.
The sources said, FAs shared update on following Condition Precedents (CPs): (i) notify licence eligibility criteria rules; (ii) notify licence eligibility regulations; (iii) notify separate performance standards for distribution and supply (from existing standards) ;(iv) notify power acquisition/power procurement regulations applicable to suppliers;(v) modify and notify tariff rules to address uniform tariff; (vi) modify current tariff guidelines to accommodate distribution licencee and supplier of last resort; (vii) clarify subsidies for Nepra consideration and in notifying tariffs; (viii) notify guidelines on how Discos can request and recover subsidies; (ix) clean up Discos’ balance sheets; (x) complete the process for issuance of shares in Discos; (xi) develop future mechanism for timely payments against government dues (TDS, FATA/ AJK, etc); (xii) as per requirement of National Electricity Policy (NEP), efficient tariff structures for Discos may be awarded and Discos target may be revisited as stated in NEP; (xiii) as per requirement of NEP, the strategic road maps entailing commercial performance milestones may be developed for each Disco; (xiv) as per NEP, the anti-theft initiatives and recovery systems may be institutionalized in each Disco with support of law enforcement agencies and provincial governments; (xv) there are various off-balance sheet liabilities of Discos which need to be recognised as per applicable financial and corporate reporting legal requirements; (xvi) define eligibility criteria for customers who can choose their supplier; (xvii) licence regime of Discos is due to be changed after expiry of their existing validity till 2022 safeguarding the wire and retail business of Discos; (xviii) CTBCM is due to be effective soon impacting the exclusivity of Discos in their existing service jurisdictions; and (xix) a confirmed timeline may be provided for full implementation of CTBCM.
Copyright Business Recorder, 2025
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