PAKISTAN Law and Practice Contributed by: Nadir Altaf and Muhammad Fahim Khan, RIAA Barker Gillette
tribution activities in their respective service territories. As these state-owned DISCOs were formed after the restructuring of WAPDA, they are referred to as “ex-WAPDA DISCOs”. They include the following companies: • Faisalabad Electric Supply Company; • Gujranwala Electric Power Company; • Hyderabad Electric Supply Company; • Islamabad Electric Supply Company; • Lahore Electric Supply Company; • Multan Electric Power Company; • Peshawar Electric Supply Company; • Quetta Electric Supply Company; • Sukkur Electric Power Company; and • Tribal Areas Electricity Supply Company. Another state-owned distribution company, Haz- ara Electric Supply Company Limited (HAZECO), has applied for a licence. HAZECO will operate within the territories of Haripur and Abbottabad. This new entity was created by splitting Pesha- war Electric Supply Company and reallocating its territory. Private The following is a non-exhaustive list of privately owned distribution companies: • K-Electric Limited, formerly a state-owned DISCO that was privatised in 2005, which is responsible for distribution activities in the city of Karachi and its surrounding areas; • Lasbela Industrial Estates Development Authority (LIEDA), which obtained a distribu- tion licence for the distribution of electric power to the industrial estates within LIEDA’s ambit; • DHA Electric Supply Company, which was formed in order to distribute electric power to housing developed by the Defence Housing Authority; and
• Bahria Town (Private) Limited, which was formed in order to distribute electric power to housing developed by Bahria – their licence was subsequently cancelled. 1.3 Foreign Investment Review Process The government encourages foreign investment by extending various protections and fiscal and financial incentives to investors. Some of these protections are provided in the law, whereas many are promised contractually via conces- sion agreements signed between the investor(s) and the government. In Pakistan’s power sector, these agreements are referred to as “implemen- tation agreements”. These protections and incentives include: • exemptions from tax and applicable duties and concessionary rates; • repatriation of investment and proceeds; • change-in-law protection; • change-in-tax protection; • lapse-of-consent protection; • force majeure protection; • dispute resolution before international arbitra- tion institutions; • government support during the consent pro- cess, including assistance in acquiring state land for project site development purposes; • direct agreements with lenders; • compensation upon termination; and • sovereign guarantee for the state-owned power purchaser’s payment obligations and compliance with obligations under the con- cession documents, etc. If any investment (whether foreign or local) is to be made in a project being developed pursu- ant to a government policy – and thus is eligible for receipt of the above-mentioned sovereign guarantee – then the relevant facilitative agency
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