DISCO privatisation: Lessons from K-Electric

Business Recorder's commentary on the privatisation of Pakistan's power distributors draws on the recent K-Electric (KE) tariff ruling. According to the piece, the power regulator's appellate tribunal dismissed KE's multi-year tariff plea, leaving the tariff around Rs32 and prompting analysts to doubt the outlook for private energy firms. The writer notes that the three DISCOs slated for sale, FESCO, GEPCO and IESCO, remain at the expressions-of-interest stage.

It recalls that Shanghai Electric Power dropped its $1.77 billion bid for a controlling KE stake in September 2025, citing unmet conditions and a changed regulatory environment. The piece says the deal would have marked the biggest overseas interest since the telecom turnarounds of 2007 to 2009. The article cites the 2018 MYT from NEPRA as a key factor, since it cut KE's profitability and lowered its valuation.

The writer argues that regulatory certainty, rooted in sound tariff allocations, is essential for privatisation to attract investors. Citing the Ministry of Privatisation's website, the piece notes plans to refine the DISCO tariff structure and create a performance-based return regime. Yet it points out that these utilities have posted single-digit T&D losses and recovery ratios above 98 percent on average. It concludes that the Shanghai Electric episode should have taught the government a lesson, though past experience makes that a difficult task.