Mr. Simon Stolp, South Asia Practice Manager for Energy at the World Bank, and his team met with Mr. Fawad Hasan Fawad, the Federal Minister of Privatisation in Islamabad. The primary focus was to discuss the government’s agenda for privatization, with a specific emphasis on the performance of Distribution Companies (DISCOs) in Pakistan’s power sector.
Minister Fawad Hasan Fawad explained the government’s privatization agenda, taking into account legal mandate of the Caretaker Government, with the aim of assisting struggling DISCOs and reducing the government’s financial burden through private sector investments.
The Minister also stressed the need for a two step strategy for privatisation of DISCOs, potentially involving a concessional model of management control with subsequent divestment strategy. Discussions with the International Finance Corporation (IFC) regarding a concession model for DISCOs were highlighted.
The Minister of Privatisation conveyed that he was actively engaged in discussions with the Minister of Energy to create a structured timeline for the divestment of DISCOs, beginning with concession agreements.
Both ministers mutually agreed that this approach represented the most suitable path forward. The Federal Minister also highlighted the current public opinion favouring privatization as a means to alleviate the financial burden on the national exchequer.
Mr. Stolp reiterated the World Bank’s commitment to supporting different aspects of this transaction in the long term, emphasising the importance of a well-structured transaction template for DISCOs.
The World Bank’s team of energy specialists pledged to present a template fora the most suitable mode of privatization for DISCOs to Ministers of Energy and Privatisation within a week.
This template would be refined with expert opinions to support ongoing power sector reform efforts.
This meeting signifies a united effort to reform and privatise Pakistan’s power sector, with the primary goal of addressing financial challenges faced by DISCOs while promoting economic growth and long-term sustainability.
The commitment to this endeavour is strong, with careful consideration given to every aspect to ensure its
success.
