Business Recorder reported at the end of July 2026 that the Privatisation Commission Board had recommended Cabinet Committee approval of restructuring plans for FESCO, GEPCO, and IESCO, including a government-owned special purpose vehicle with authorised share capital of Rs 250 billion to carve out selected assets and liabilities. The three DISCOs would raise their own authorised capital substantially, with combined authorised capital figures reported in the hundreds of billions of rupees, and EOI deadlines staggered through August and early September 2026.
Carve-out SPVs are how governments make utility sales bankable when legacy liabilities would otherwise scare buyers. They are also how taxpayers quietly retain the ugly bits. Transition Economics Institute’s test is disclosure: which liabilities move to the SPV, how will they be serviced, and what contingent claims remain on the privatised entities. Without that, the SPV is a fiscal shadow.
FESCO, GEPCO, and IESCO are relatively more attractive than high-loss southern and western DISCOs, which is why they lead. Cherry-picking is rational for a first batch. It becomes a problem if residual DISCOs are left without a reform path. Parallel performance contracts for the unsold companies are mandatory to avoid a two-tier collapse.
Investor interest reported around EOIs is encouraging only if qualification criteria emphasise operational capability, not only financial heft. Flippers who underinvest after closing repeat public failure privately. NEPRA licence conditions on investment and service quality must be ready on day one.
July’s SPV decision should be followed by published schemes of arrangement and independent valuations. Privatisation conducted as rumour fails. Privatisation conducted as paperwork in public can still be contested, but it can also close.
Institutional accountability remains the missing hinge. NEPRA, the Power Division, CPPA-G, the system operator, and the DISCOs each hold a piece of the puzzle, yet none owns the full cash-conversion cycle. Until reporting, incentives, and penalties are aligned to the same monthly cash target, reform statements will continue to outrun results. Transition Economics Institute will keep measuring progress by whether billed energy turns into settled rupees, whether fixed generation obligations shrink in line with the demand profile, and whether consumers see durable relief rather than a temporary rebate financed by another round of arrears.