Privatisation Commission gets ‘overwhelming response’ from investors for Iesco privatisation

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A power transmission tower in Karachi, Pakistan, on January 24, 2023. — Reuters/File
A power transmission tower in Karachi, Pakistan, on January 24, 2023. — Reuters/File

ISLAMABAD: The Privatisation Commission on Monday said it received an “overwhelming response” from domestic and international investors for the privatisation of Islamabad Electric Supply Company (Iesco).

Iesco is among the three electricity distribution companies in Discos Batch-I, alongside Faisalabad Electric Supply Company (Fesco) and Gujranwala Electric Power Company (Gepco).

In a statement on Monday, the commission said it received expressions of interest (EOIs) from three Turkish and seven local prospective investors seeking to acquire 51 per cent to 100pc shareholding in Iesco, along with management control.

The Turkish investors are ⁠Aktor Elektrik Enerji, ⁠⁠Genvera Enerji and ⁠⁠Cengiz Enerji — all of whom had also expressed interest in Gujranwala Electric Power Company (Gepco).

The local investors include ⁠Engro Energy; a consortium comprising ⁠Artistic Milliners, The Lake City Holdings, Fatima Capital Limited, Din Ventures (Pvt) Limited and Fazal Cloth Mills Limited; along with a consortium led by Hubco Power Holding and including Lucky Cement Limited, Kohat Cement Limited and Metro Ventures (Private) Limited.

Pakistani investors also include ⁠⁠Sapphire Fibres Limited,⁠ Novatex Limited, ⁠Bestway Cement Limited and a new consortium comprising Hasnaat Brothers Construction Co. (Pvt) Limited, Dhilal Holding Group, Pak Steel, Bio-Labs (Pvt) Limited and Farid Steel Casting (Pvt) Limited.

Most of the investors have also submitted their EOIs for the privatisation of Faisalabad and Gujranwala power companies. One new investor consortium has emerged for Iesco led by Hasnaat Brothers Construction.

The Privatisation Commission welcomed the investor community’s extensive engagement during the domestic and international roadshows, as well as their confidence in Pakistan’s power-sector reform agenda.

“This is an important milestone in the privatisation of Discos. The strong response received for Iesco reflects that investors have confidence in the potential of Pakistan’s electricity distribution sector and in the Government’s commitment to a transparent, competitive and professionally managed process,” said commission head Muhammad Ali, also the adviser to the prime minister on privatisation.

The commission said it would now be engaging constructively with the prequalified investors through the due-diligence process and to seek alignment on an equitable, transparent and predictable post-privatisation regime.

It added that the process was intended to improve operational efficiency, modernise distribution infrastructure, strengthen customer service, and reduce losses to support a more financially sustainable power sector, which over time will lead to more affordable and reliable power for consumers.

The EOIs and statements of qualification (SOQs) submitted by the interested parties will now undergo a comprehensive evaluation against the approved prequalification criteria. Applicants meeting the prescribed requirements will be prequalified and invited to the next stage of the transaction, where they will be granted access to the Virtual Data Room (VDR) to undertake detailed buy-side due diligence.

Ten interested parties have been prequalified for Fesco, whereas 11 EOIs were received for Gepco, which are currently under evaluation for prequalification.

The commission said it would ensure an open, transparent and competitive privatisation process, undertaken in the public interest and in support of the government’s wider power-sector reform agenda.

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