South Asia Practice Manager for Energy at the World Bank Simon Stolp and his team met with the Federal Minister of Privatization Fawad Hasan Fawad on Wednesday.
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.
Fawad explained the government’s privatization agenda, taking into account the legal mandate of the caretaker government, to assist struggling DISCOs and reduce the government’s financial burden through private sector investments.
The minister also stressed the need for a two-step strategy for the privatization of DISCOs, potentially involving a concessional model of management control with a subsequent divestment strategy. Discussions with the International Finance Corporation (IFC) regarding a concession model for DISCOs were highlighted.
The minister conveyed that he was actively engaged in discussions with the energy minister 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 minister highlighted the current public opinion favoring privatization as a means to alleviate the financial burden on the national exchequer.
Stolp reiterated the World Bank’s commitment to supporting different aspects of this transaction in the long term, emphasizing the importance of a well-structured transaction template for DISCOs. The World Bank’s team of energy specialists pledged to present a template for the most suitable mode of privatization for DISCOs to Ministers of Energy and Privatization within a week. This template would be refined with expert opinions to support ongoing power sector reform efforts.
Source: Pro Pakistani