ISLAMABAD: The South Asia Practice Manager for Energy at the World Bank, Simon Stolp, along with his team, called on Pakistan’s Minister of Privatization Fawad Hasan Fawad in Islamabad on Wednesday and discussed the government’s Privatization Strategy.
The primary focus of the meeting was the government’s privatization agenda, with a specific emphasis on the performance of Distribution Companies (DISCOs) in Pakistan’s power sector, according to a press release issued here Wednesday.
The federal minister explained the government’s privatization agenda, taking into account the legal mandate of the Caretaker Government, with the aim of assisting struggling DISCOs and reducing the government’s financial burden through private sector investments.
Two-Step Privatization Strategy Considered
He 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 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 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.
This meeting signifies a united effort to reform and privatize 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 endeavor is strong, with careful consideration given to every aspect to ensure its success.
