Power Play: Nandipur, Guddu Out of Privatization, PSO Takes Control to Settle Gas Debt
Power Play: Nandipur, Guddu Out of Privatization, PSO Takes Control to Settle Gas Debt

In a surprising move to tackle Pakistan’s persistent energy sector woes, the Nandipur and Guddu power plants – two of the country’s most efficient – have been removed from the privatization list. Instead, the government will settle Rs100 billion of outstanding gas circular debt by granting Pakistan State Oil (PSO) controlling stakes in both plants.

Read More: PSO to sell 30% stake in PRL to China’s United Energy Group

This decision, reportedly reached by the Privatization Commission in collaboration with Power and Petroleum authorities, marks a significant shift in strategy. Privatization of these plants had been on the table for years, aiming to inject much-needed funds into the struggling energy sector.

Instead, the government will directly address the gas circular debt burden, a major pain point for both PSO and the wider energy ecosystem. This debt stems from unpaid bills for Re-Gasified Liquefied Natural Gas (RLNG) used by power plants like Nandipur and Guddu. By assuming control of these plants, PSO effectively takes on the responsibility of managing this debt and its associated cash flow issues.

While the decision removes immediate pressure on PSO, it raises questions about the future of privatization in the energy sector. Critics might argue that this move sets a precedent for intervention and could discourage future investors. However, supporters highlight the immediate relief provided to PSO and the potential for improved efficiency by placing these state-of-the-art plants under a single entity focused on operational turnaround.

One thing is clear: this is a complex situation with no easy answers. Only time will tell whether this shift in strategy will bring lasting solutions to Pakistan’s energy challenges or simply delay the need for broader systemic reforms.

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