After PIA’s successful privatisation, all eyes are on power distribution companies (the so-called discos), which are at the top of the active privatisation list.

Consultants have been appointed and millions of dollars have been spent.

However, these assets lack investor interest, as there is no clarity on the regulatory front. Plus, the only privatized entity (K-Electric) is being presented by government agencies involved in the energy sector as a poster child.

In the energy value chain, the easiest business is generation, where a very profitable structure is in place. Once IPPs (Independent Power Producers) make an investment, they have thirty years of guaranteed returns. On the flip side, the most complex and difficult business (distribution) has no, or very low, incentive. There are issues of rights of way, politically influenced connections, and pricing, to name a few.

Distribution is the most complex business in the chain and, without an overall sector overhaul and a regulatory reset, there is little hope of any success. The problem is that the same people deployed in government regulatory and operating agencies (such as the power ministry,........

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