Multan Electric Power Company (MEPCO/The Company) is a public unlisted company, incorporated in Pakistan on May 14, 1998. Its registered office is situated at Khanewal road, Multan

The Company was established and took over the assets, liabilities, rights and obligations of the Multan Area Electricity Board (MAEB), which is owned by Pakistan Water and Development Authority (WAPDA). The transfer also included other specified assets and liabilities as mutually agreed. Prior to the amendment of the NEPRA Act in April 2018, the electricity distribution function encompassed both the physical infrastructure (commonly referred to as the wire business) and the sale of electricity to end-consumers. However, the NEPRA (Amendment) Act, 2018, introduced a structural change by separating the sale of electricity from the distribution function. MEPCO currently distributes and supplies electricity to over 8mln customers within its licensed territory.

MEPCO was initially deemed to hold a license for the supply of electric power for a period of five years, which expired on April 24, 2022. Subsequently, NEPRA provisionally renewed the license for six months. Thereafter, upon MEPCO's application for renewal/extension, NEPRA granted a distribution license valid for 20 years, up to May 2043. Notably, this license was granted on a non-exclusive basis, following the 2018 amendment to the NEPRA Act which did away with exclusivity for distribution licensees. In addition, NEPRA has also issued an Electric Power Supply License to MEPCO, valid until April 2043. MEPCO also continues to carry the responsibility of Supplier of Last Resort (SOLR), a role inherently associated with its distribution license. MEPCO operates through nine administrative zones: Multan, Khanewal, Sahiwal, Bahawalpur, Bahawalnagar, Muzaffargarh, Dera Ghazi Khan, Rahim Yar Khan, and Vehari. Its primary mission is to ensure the reliable and safe supply of electricity to all consumers within its jurisdiction.

MEPCO is 100% owned by Government of Pakistan through Ministry of Energy –Power division. While the nominal one shares each are held in the names of Chairman of the BoD and CEO of the Company

The Company, backed by government ownership, is the largest power distribution company in Pakistan with a consumer base of approximately 8.82 million as of FY25. Its government ownership provides strategic importance, institutional support, and access to policy and financial assistance. At the same time, the Government’s ongoing privatization agenda, under which MEPCO has been included in the fourth batch of DISCOs identified for privatization, reflects the broader sector reform and modernization initiatives. This potential transition is expected to support greater operational efficiency and commercial independence, while MEPCO continues to benefit from strong government backing during the current ownership structure.

MEPCO is a major electricity distribution company supplying power across Southern Punjab.Entirely owned by the GoP, it benefits from stable ownership, institutional experience, and financial support. The GoP is actively working toward the development of a competitive electricity market through the implementation of the CTBCM (Competitive Trading Bilateral Contract Market) model. As this market structure evolves, MEPCO is expected to operate with greater independence and efficiency in a liberalized environment, gradually reducing its reliance on government support.

MEPCO remains under sovereign ownership, and given its strategic importance as the country’s largest electricity distributor, the likelihood of continued government support remains strong. This support, particularly in the form of financial assistance, has historically included capital injections when required. In addition, MEPCO receives subsidies from the Government to ensure affordable electricity for low-income consumers. These subsidies comprise components such as the Tariff Differential Subsidy (TDS) and AQTA Subsidy.

The Board of Directors (BoD) of MEPCO comprises 8 members, including independent, non-executive, and executive directors. The Board is chaired by Mr. Amer Zia, who serves as Chairman/Independent Director. The independent directors include Mr. Tahir Basharat Cheema, Ms. Zainab Janjua, and Khawaja Jalaluddin Rumi, while other Board members include Mr. Javed Iqbal Khan and Dr. Naeem Rauf. Jam Gul Muhammad Zahid serves as CEO/Executive Director. The Board’s composition provides a diverse mix of experience and expertise for effective governance and strategic oversight.

The Ministry of Energy has appointed MEPCO’s current Board members, with Mr. Amer Zia serving as Chairman/Independent Director. Other independent directors include Mr. Tahir Basharat Cheema, Mr. Aamer Naseem Sheikh, Ms. Zainab Janjua, and Khawaja Jalaluddin Rumi. Ms. Shireen Malik Sher and Dr. Farrukh Naveed serve as Non-Executive Directors, while Jam Gul Muhammad Zahid serves as Executive Director. These appointments are expected to strengthen MEPCO’s governance framework and enhance its operational efficiency.

MEPCO’s Board of Directors (BoD) demonstrated strong governance and oversight by convening 13 meetings to deliberate on the Company’s strategic decisions. Attendance remained robust, with a majority of directors participating in over 80% of the meetings, reflecting their active engagement. To ensure focused oversight across critical areas, the Board has established six specialized committees: (i) Procurement & Disposal Committee, (ii) Audit & Finance Committee, (iii) Legal Committee, (iv) Customer Service, HSE & Quality Assurance Committee, (v) HR & Nomination Committee, and (vi) Policy, Strategy, Market Reforms & Risk Management Committee

Muniff Ziauddin & Co. Chartered Accountants, Lahore, are the external auditors of the company. The auditors have given an unqualified opinion on the company’s financial statements for the year ended June 2025, with an Emphasis of Matter paragraph.

MEPCO has a well-defined and properly documented organizational structure designed to support effective governance, operational efficiency, and accountability. At the top of the hierarchy is the Chief Executive Officer (CEO), who is responsible for the overall management and strategic direction of the Company. The CEO, with consolidated input from all functional departments, reports directly to the BoD. Supporting the CEO are the heads of key departments, including the Chief Financial Officer (CFO) and General Managers of Operations, Customer Services, Technical Services, Planning & Engineering, HR & Admin, IT, and Procurement & Store. These departments are led by experienced professionals and are further supported by competent and skilled team members who bring specialized expertise to their respective functions. Additionally, the Company Secretary and the Chief Internal Auditor maintain independent reporting lines directly to the Board of Directors, ensuring transparency and compliance with corporate governance requirements.

Engr. Jam Gul Muhammad is the current Chief Executive Officer (CEO) of MEPCO, appointed for a three-year term. He brings with him decades of professional experience. Supporting the leadership team, Mr. Ansar Mehmood serves as the Chief Financial Officer (CFO) of the Company and is a Fellow Member of the Institute of Cost and Management Accountants, while Engr. Khalid Mehmood holds the position of General Manager (Operations). In addition, MEPCO’s management team comprises other seasoned professionals heading key functions, collectively ensuring effective execution of the Company’s strategic and operational objectives.

MEPCO management team demonstrates effectiveness in its role, supported by relevant experience, professional qualifications, and a long-standing association with the Company. The team is responsible for overseeing key functional areas, allowing the Company to maintain operational continuity, comply with regulatory requirements, and implement strategic initiatives in an organized and structured manner. The management’s role is further reinforced by the BoD through its specialized committees, which provide oversight and strategic guidance on critical matters.

MEPCO has initiated the process to achieve Digital Transformation by implementing ERP with an aim to achieve Business Automation of the Company’s processes. The ERP consists of Business Intelligence Analytics along with modules of Project Delivery and Asset Management supported by the modules of Finance, Supply Chain and Human Resource.

MEPCO maintains an adequate control environment with defined policies and procedures. The Company’s internal audit function performs regular reviews on the financial, operational and compliance controls. In addition to routine audits, dedicated teams have been established to target high-loss areas, aiming to reduce distribution losses and improve efficiency. A comprehensive audit program distinct from standard financial audits has also been implemented. This program covers a broad range of operational areas, including human resources, procurement, and quality assurance, with the objective of identifying potential risks, preventing corruption, eliminating ambiguities, and ensuring transparency. These proactive measures are designed to strengthen internal controls and enhance the overall governance of the Company.

Pakistan’s power distribution sector continues to face structural inefficiencies, with high transmission and distribution (T&D) losses, weak recoveries in certain regions, and reliability issues remaining key challenges. During FY2024-25, aggregate T&D losses of DISCOs stood at 17.55%, compared with NEPRA’s allowed level of 11.43%, resulting in an estimated financial impact of around PKR 265 billion. Revenue recovery also remained uneven, with overall recovery at 96.6% and an estimated PKR 132 billion revenue shortfall. These inefficiencies continue to contribute to circular debt and place pressure on the financial sustainability of the sector.The sector is undergoing structural reforms aimed at improving operational efficiency, governance, accountability, and financial sustainability. Given the large geographical coverage and customer base of certain DISCOs, the Government has been evaluating the bifurcation of larger entities into smaller distribution companies to improve operational management and service delivery. MEPCO, along with PESCO and QESCO, has been considered under this initiative. In parallel, the Government is pursuing greater private-sector participation and organizational restructuring across DISCOs, while NEPRA has directed companies to segregate distribution and supply functions in line with the evolving regulatory framework.The distribution landscape is also being reshaped by increasing solarization and the transition toward a competitive electricity market. Rising electricity costs have encouraged consumers to adopt rooftop solar and net-metering solutions, which could reduce grid demand and transmission requirements while placing pressure on DISCOs’ sales volumes and revenue base. Meanwhile, the implementation of the Competitive Trading Bilateral Contract Market (CTBCM) is intended to gradually move the sector away from the traditional single-buyer model by allowing eligible bulk consumers to choose their electricity supplier. As these reforms progress, DISCOs are expected to face increasing pressure to improve efficiency, service quality, and commercial performance while adapting to a more competitive and decentralized power market.

Currently, there are eleven DISCOs including KE, operating in Pakistan under the administrative purview of the Ministry of Energy (Power Division). MEPCO is the largest Power distribution company in terms of Consumer base of around  8.82mln consumers as of FY25. It has license to operate in 15 administrative districts of Southern Punjab. However, the distribution wing of the power sector has grappled with persistent challenges, including high T&D losses and inadequate bill recoveries by the DISCOs.

The National Electric Power Regulatory Authority (NEPRA) oversees the sector’s regulatory framework, including procurement mechanisms and tariff setting, based on the costs of generation, transmission, and distribution. While NEPRA determines cost-reflective tariffs, the government enforces a uniform tariff across all DISCOs to ensure affordability and equity, bridging the cost gap through subsidies.In FY25, revenue declined by 12.3% compared to FY24, reaching PKR 524,062 million. During 9MFY26, revenue stood at PKR 368,997 million, while units sold declined by 1.98%, falling to 16,568 GWh. The decline in units sold is also partly attributed to the increasing shift of consumers toward rooftop solar installations, which has begun to impact grid-based consumption. As more consumers adopt net metering and distributed generation, especially in urban and industrial areas, the trend is likely to continue, leading to further moderation in energy demand from the distribution grid.

Despite revenue decline, MEPCO’s gross profit stood at PKR 46bln in 9MFY26 (FY25: PKR 55bln), translating into a normalized gross margin of 12.5% (FY25: 10.5%). The improvement is primarily due to lower cost of sales during the period. Consequently, the Company posted a net profit of PKR 10.8bln in 9MFY26 (FY25: net profit of PKR 5.3bln), with a net margin of 2.9% (FY25: 1.0%). The profitability outlook is expected to remain stable; however, any delay in timely tariff adjustments may continue to pressure margins. Notably, in the case of DISCOs, costs are incurred in real time while revenues are recognized with a lag, reflecting the regulated tariff framework. As a result, financial performance remains sensitive to the timing of tariff adjustments, leading to periods of elevated profitability followed by substantial losses in other periods.

MEPCO is a mid-tier electricity distribution company in Pakistan, primarily catering to a large rural customer base. While it serves one of the highest numbers of consumers among DISCOs, the per-consumer utilization remains relatively low compared to urban-centric companies. The majority of its customers belong to the domestic segment, with smaller contributions from industrial and commercial users. Under the Competitive Trading and Bilateral Contracting Market (CTBCM) framework and the National Electricity Policy, MEPCO has established a Market Implementation and Regulatory Affairs Department (MIRAD). This unit acts as a liaison with the evolving power market and regulatory bodies, undertaking responsibilities such as power procurement planning, contract management, compliance, and coordination with NEPRA and other sector stakeholders. Through MIRAD[AW1] , MEPCO is aligning itself with sector reforms, ensuring readiness for competitive market operations despite the challenges of its largely rural and low-utilization consumer profile.

The business model of electricity distribution companies typically does not involve significant inventory, except for minimal store items used for maintenance and repairs. Their working capital cycle primarily consists of receivables from consumers against electricity sales, subsidy receivables from the government, and payables to CPPA-G for power purchases. The Recovery ratio in FY25 remains over 101.7% representing a better cash collection.
MEPCO has sustained its operations through internal cash generation, with no working capital lines currently in place and, consequently, no utilization of short-term borrowings. As of 9MFY26, receivables stood at PKR 136,534mln, while payables were recorded at PKR 105,397mln. This position has resulted in positive working capital days of 12 (FY25: negative 28 days), reflecting an improvement in the Company’s liquidity position.

In 9MFY26, the Company experienced a significant improvement in its coverage position, with FCFO-based coverage increasing to 1.6x (FY25: 0.3x). This improvement can be attributed to a substantial increase in funds flow from operations (FCFO), which amounted to PKR 12.2bln (FY25: PKR 3.2bln) in 9MFY26. The improvement in FCFO reflects stronger operating cash generation during the period, supported by improved profitability compared with the previous year.

As of 9MFY26, MEPCO’s capital position showed a notable improvement, with shareholders’ equity standing at negative PKR 25.7 billion compared to negative PKR 76.7 billion in FY25, supported by an increase in general reserves and improvement in accumulated losses. MEPCO’s total debt stood at PKR 16.0bln, comprising long-term borrowings and their current maturities, with no reliance on short-term financing, compared with PKR 15.8bln in FY25.