Pakistan’s Privatization Commission plans to sell the first of its nine power companies, Faisalabad Electric Co. Ltd (FESCO) , with management control to the private sector by March next year, government officials said.
Led by the Chairman Privatization Commission, Mohammad Zubair, a team of the commission gave a detailed presentation on Pakistan’s plan to privatize its power companies at a roadshow held at the Ronald Regan International Trade Center on October 8.
Attended by energy experts and representatives of American power companies, the event highlighted the timeframe for selling as many as nine power sector units on the list of 26 entities Pakistan wants to sell to the private sector. Many of them are loss-making companies.
Zubair underscored the political stability and receding militant violence as the reasons that has made Pakistan an attractive destination for local and foreign investors.
Despite efforts, Pakistan could not undertake even a single transaction between 2008 and 2013, as security concerns kept the investors at bay.
Prime Minister Nawaz Sharif’s government, which took over charge after winning a 2013 general election launched a military operation in 2014 in the North Waziristan’s tribal region seen as the global hub of terrorism.
The year-long operation has been a success and has led to considerable reduction of violence, giving South Asia’s second-biggest economy to pursue its ambitious privatization agenda.
In the last two years, Sharif’s government successfully completed five transactions, five of them capital market deals, and raised over $1.7 billion.
The roadshow was arranged in Washington to attract US investors to Pakistan’s energy sector. The Obama administration is already helping Pakistan’s government in increasing electricity production to cover the shortfall of nearly 6000 megawatts in supply and demand.
Pakistani officials informed the gathering of the roadshow that due diligence for FESCO has already been completed and the government would invite Expression of Interest (EOI) from local and foreign investors later this month.
The bidding is expected by end-March and the intervening time period will provide prospective investors to carry out their own due diligence.
The next two power units will be offered for sale in June, 2016. Pakistan intendents to complete all power sector transactions within a year’s time.