Pakistan proposes to open the retail electricity market to competition

The Privatisation Commission of Pakistan has proposed separating electricity distribution networks from supply and opening retail supply to licensed competitive suppliers, ahead of the planned privatisation of the state-owned distribution companies (DISCOs) in early 2027 as required by the country's IMF programme (Business Recorder, 22/10/2026). 

Distribution Network Operators (DNOs) would own, run and develop the power distribution networks as regulated natural monopolies under the National Electric Power Regulatory Authority (NEPRA), the power sector regulator. Supply would progressively open to licensed Competitive Suppliers, which would take over the legacy contracts from the Central Power Purchasing Agency-Guarantee (CPPA-G), the state-owned single buyer of electricity, along with the matching customer portfolios. They would be responsible for electricity procurement, customer management, billing, collections and associated commercial obligations. In each distribution region, a Supplier of Last Resort would ensure continuity of supply if a supplier defaults or exits the market. Finally, ring-fenced ancillary businesses could undertake commercial and energy-transition activities.

The commission stresses that privatising the state-owned distribution companies (DISCOs) will not on its own resolve the sector's structural problems. These include persistent circular debt (unpaid bills building up along the payment chain), high tariffs and substantial capacity-payment obligations, made worse by demand erosion as consumers move to distributed solar and self-generation.