As discussions between Pakistan and the International Monetary Fund (IMF) draw to a close ahead of the 2025-26 federal budget announcement, the global lender has increased pressure on Islamabad to accelerate its privatization agenda.
Sources familiar with the matter reveal that the IMF has reiterated its call for swift divestment of loss-making state-owned enterprises and urged a reduction in public sector size. In response, Pakistani officials have assured the Fund that downsizing efforts across government-run institutions will be finalized by the end of this year.
The long-delayed privatization of Pakistan International Airlines (PIA) is expected to wrap up within 2025, as key investor-related issues such as outstanding taxes and equity shortfalls have reportedly been ironed out. Hopes are also pinned on the European Union removing its longstanding ban on PIA flights, a move factored into the airline’s privatization roadmap.
To support these plans, a financial adviser has been appointed to guide the sale of three major power utilities — IESCO, FESCO, and GEPCO — with a completion goal set for December 2025. Additional electricity providers in Hyderabad, Sukkur, and Peshawar are scheduled for privatization in a later phase, while the Nandipur Power Plant’s transfer to private ownership is slated for early 2026.
Further divestments are also under review, including key state assets like New York’s Roosevelt Hotel, the First Women Bank, and the House Building Finance Corporation (HBFC). The Privatization Commission has confirmed that the framework for these transactions is currently being finalized.
Privatizing profitable public enterprises has become central to the government’s reform blueprint aimed at minimizing bureaucratic interference and enhancing private sector investment.
In a recent high-level meeting in Islamabad, Finance Minister Muhammad Aurangzeb engaged with IMF’s regional director Jihad Azour and both the outgoing and incoming IMF mission chiefs. The dialogue included senior figures from Pakistan’s financial leadership, with the minister reaffirming the government’s resolve to pursue structural reforms and meet its loan program obligations.
