Privatisation revenue projected at ‘zero' for current, next four years
This was revealed in the first staff level review report uploaded on the International Monetary Fund website this Saturday which further noted that privatisation proceeds had been zero since 2019-20.
Nonetheless the IMF underscored the government's commitment to prioritizing the privatization of commercial State Owned Entities (SOEs). It noted that the focus will be on profitable commercial SOEs, supported by the completion of the SOE privatization classification. The objective is to reduce the government's commercial footprint and attract investments that can support Pakistan's long-term development.
The report noted significant progress on several strategic transactions, particularly the privatization of Pakistan International Airlines (PIA). It stated that key investor concerns have been addressed, including the resolution of negative equity, settlement of longstanding tax liabilities, and the lifting of the European Union's ban on PIA operations. The report noted that these steps, combined with an ongoing investor outreach program and completed due diligence, have laid the groundwork for a successful transaction by August 2025.
It further reported that the privatization of First Women's Bank Limited (FWBL) and the House Building Finance Corporation (HBFC) is on track for completion by May 2025; and that buyer selection has been finalized and transaction documents are under review. The report stated that the process for Zarai Taraqiati Bank Limited (ZTBL) has also begun, with asset profiling underway and the launch of the transaction targeted for the fourth quarter of 2025. A financial advisor has been appointed to support the process.
The report emphasized that the privatization of distribution companies (DISCOs) and generation companies (GENCOs) is central to restoring the financial viability of the energy sector. It noted that for Batch I DISCOs (IESCO, FESCO, GEPCO), sell-side due diligence is underway, and bidding is scheduled for December 2025. It stated that advisory services for Batch II DISCOs (HESCO, SEPCO, PESCO) were initiated in April 2025. It further highlighted that bidding for Nandipur GENCO is targeted for January 2026. The report noted that progress is also being made on finalizing the transaction structure for the Roosevelt Hotel.
It stated that efforts are ongoing to identify, cost, and formalize Public Service Obligations (PSOs) for the seven SOEs with the largest fiscal claims. The process remains on track to be completed by June 2025, in line with Schedule II of the SOE Act and the SOE Policy. The report highlighted that this step is essential for improving fiscal transparency and ensuring that PSOs are delivered efficiently under properly costed and contracted frameworks.
The report urged that all divestments and procurement activities under the Sovereign Wealth Fund must adhere to international best practices. It emphasized that procedures should be open, competitive, transparent, and non-discriminatory, with clear disclosure requirements and full transparency of beneficial ownership. It noted that while SWF rules will be institutionally independent of general government regulations, they will generally align with national standards to ensure policy coherence.
The report confirmed that structural benchmarks are being met and all policy actions necessary to prepare two DISCOs for privatization were completed by end-January 2025. It further noted that financial reporting and transparency requirements continue to be observed, including quarterly reporting of privatization proceeds and bi-annual reporting of privatization progress.
Copyright Business Recorder, 2025
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