Roadshows have generated buzz, but the real test for Pakistan's electricity distribution privatisation lies in meeting investor demands without sacrificing consumer protections. Prime Minister Shehbaz Sharif's latest directives signal a push to accelerate the process, yet the path forward is fraught with financial and structural hurdles. Main Developments At a review meeting in Islamabad, PM Shehbaz ordered the adoption of a comprehensive strategy to attract international investors for the privatisation of power distribution companies (Discos). He also directed the Privatisation Commission to complete its restructuring within one month, including the recruitment of experts in finance, law, and information technology. Read also: 5 Key Facts on Pakistan's Gas Sector Unbundling Plan Investor outreach has already shown promise. Officials reported that roadshows in Turkey, Saudi Arabia, and China produced encouraging results, and that domestic marketing in seven major cities had been concluded. The first phase targets three utilities: Gujranwala Electric Power Company (Gepco), Faisalabad Electric Supply Company (Fesco), and Islamabad Electric Supply Company (Iesco). Investors have expressed interest, but their conditions are steep. They seek an 18% dollar-based return, an end to uniform consumer tariffs, and the freedom to generate and trade electricity independently. They also demand 8–10 years of tariff visibility and the government's exit from the sector. The government has pushed back on one key demand. PM's Adviser on Privatisation Muhammad Ali stated that dollar-based returns are off the table, offering instead rupee-based returns of 14–15% plus profitability of up to 18–20% through key performance indicators that share efficiency gains. The prime minister also stressed that consumer interests must remain a priority, instructing officials to develop a comprehensive grievance redress mechanism for customers of the privatised entities. He called for adherence to international best practices and timely completion of all legal and financial regulatory frameworks. Background The three Discos earmarked for the first phase are considered the most viable among the 11 distribution companies carved out of the Water and Power Development Authority (Wapda) in 1998. Together, they serve more than 14 million consumers across Punjab, the Islamabad region, and parts of Azad Jammu and Kashmir. On May 19, the Privatisation Commission invited expressions of interest (EoIs) for the sale of Iesco, Gepco, and Fesco. Deadlines have been set for July 7 (Fesco), August 24 (Gepco), and September 7 (Iesco), with the transaction offering investors 51% to 100% shareholding and management control. The privatisation is part of a broader economic reform agenda aimed at improving efficiency and attracting both foreign and domestic investment. The government hopes private-sector management will enhance service quality, a goal that has eluded state-run utilities for decades. Why It Matters The outcome of these sales will test whether Pakistan can execute large-scale privatisations in a politically sensitive sector. Power tariffs are a national flashpoint, and any perception that privatisation harms consumers could trigger backlash. Financial viability is another critical factor. The government's refusal to offer dollar-based returns may deter some investors, but Ali expressed confidence that rupee-based returns plus KPIs would still attract interest. If the sales succeed, they could set a precedent for future privatisations, including the planned divestment of Sukkur and Hyderabad electric companies. Efficiency gains from privatisation could also help reduce the average uniform tariff, a promise that resonates with consumers burdened by high electricity costs. The absorption of surplus capacity, coupled with private-sector management, is expected to lower costs over time. What's Next The Privatisation Commission must now complete its institutional restructuring within a month, a tight timeline that requires swift recruitment of skilled professionals. Simultaneously, it will continue investor outreach in Saudi Arabia, China, and other Middle Eastern capitals, including Qatar, Bahrain, and Oman. After the EoI deadlines pass, the government plans to run three parallel transactions, with bidding scheduled for October, November, and December 2026. Adviser Ali noted that transaction structures must be corrected before October, suggesting that final terms are still being refined. Beyond the first three Discos, Sukkur and Hyderabad electric companies are slated for restructuring and privatisation by August–September next year. The government's ability to meet these deadlines will depend on sustaining investor interest and navigating the complex regulatory and legal frameworks still under development.