Discos’ sell-off faces investor trust deficit

Dawn reported that the government is hurrying steps to make regulation more predictable and is weighing political risk cover from multilateral lenders, aiming to attract bidders for the sale of distribution companies. Informed sources told the paper that reopening IPP contracts and recent legal developments concerning K-Electric have raised risk perceptions among local and foreign investors now carrying out due diligence on the first batch of Discos.

A Sindh High Court stay order issued on Wednesday suspended the Nepra and appellate tribunal decisions on K-Electric's multi-year tariff, which had effectively reduced a federal subsidy worth around Rs200 billion. KE challenged those decisions in the court, which also issued notices to respondents ahead of a hearing on Oct 15. The order came on the same day Finance Minister Muhammad Aurangzeb chaired a steering committee meeting on power sector regulatory reform.

Aurangzeb said the sector's changing landscape calls for rules that can keep pace with technology, while also backing efficiency, investment, consumer welfare and private participation, an official statement noted. The committee also reviewed growing solarisation, shifting demand patterns, service quality and the case for better targeting of subsidies. He urged a market structure offering clearer efficiency incentives and more room for competition.