Terms of Reference (TOR): Study on Power Distribution Sector Reform, Industrial Green Market Readiness, and MRV Assessment

An Integrated Case Study of Selected DISCO Reform and Export-Oriented Industrial Sector Transition

Alternate Development Services (ADS)  |  AREC-Pakistan

1. Introducing Research Partners

Alternate Development Services (ADS)

Alternate Development Services (ADS) is a policy advisory and research organization committed to advancing sustainable energy solutions, power sector reforms, and industrial decarbonization in Pakistan. ADS works with policymakers, utilities, development partners, industries, and stakeholders to promote evidence-based policy reforms and improve the efficiency, sustainability, and governance of Pakistan's energy sector.

Alternate and Renewable Energy Campaign (AREC-Pakistan)

The Alternate and Renewable Energy Campaign (AREC-Pakistan) is an initiative of ADS that promotes the adoption of renewable energy, sustainable business practices, and energy sector reforms across Pakistan's industrial sector. AREC works with textile, sports goods, apparel, and other export-oriented industries to strengthen environmental performance and improve compliance with emerging international sustainability requirements.

2. Context of the Proposed Study

Pakistan’s power distribution sector continues to face significant challenges, including high transmission and distribution losses, low bill recovery rates, financial inefficiencies, circular debt accumulation, and governance-related shortcomings. Despite multiple reform initiatives, the operational and financial performance of Distribution Companies (DISCOs) remains below desired benchmarks, constraining service quality and investor confidence in the sector. The Government of Pakistan has therefore expressed interest in introducing private sector participation and privatization in selected DISCOs (IESCO, LESCO & FESCO) to improve operational efficiency, service quality, investment mobilization, and financial sustainability. However, before undertaking such structural changes, a comprehensive assessment of the current status, challenges, opportunities, and reform readiness of the sector is required.

In parallel, Pakistan’s export-oriented industries, particularly the textile and sports apparel sectors, face growing international pressure to demonstrate verifiable environmental performance, reduce greenhouse gas (GHG) emissions, and comply with evolving green market access requirements. International buyers, brands, and regulatory frameworks increasingly demand robust Measurement, Reporting, and Verification (MRV) of energy use and emissions as a precondition for supply chain participation and green certification. While MRV and market readiness are inherently industry-driven processes, their success is closely linked to the policy, legal, and operational frameworks of the power distribution sector. DISCOs are the primary interface between the national grid and industrial bulk consumers and therefore play a decisive role in enabling or constraining the industrial green transition. The quality of metering, energy data reporting, open access provisions, and DISCO frameworks within a DISCO directly determines whether industrial consumers can access the verified consumption data and renewable energy procurement pathways they need.

Accordingly, Alternate Development Services (ADS) seeks to commission an integrated study that evaluates a selected DISCO, such as LESCO, FESCO, or others, for privatization and reform readiness while simultaneously assessing the green market compliance capacity and MRV gaps of connected export-oriented industrial sectors. The study will assess how power sector frameworks can be aligned to support the legal, regulatory, and technical demands of industrial green market transitions, and will generate evidence-based recommendations across all three dimensions, proposing actionable roadmaps for reform, private sector participation, and sector restructuring.

3. Scope of the Study

The scope of the study includes:

A. Power Distribution Sector Reform (Primary Focus)

• Conduct a comprehensive performance and readiness assessment of a selected DISCO, covering operational, financial, technical, and governance dimensions. 

• Collect and analyze historical operational, technical, financial, and commercial data of the selected DISCO. 

• Assess key performance indicators including transmission and distribution losses, recovery rates, reliability indices, outage frequency, operational efficiency, and workforce productivity. 

• Evaluate the financial health of the selected DISCO, including revenues, expenditures, subsidy dependence, circular debt contribution, asset conditions, and investment requirements. 

• Review governance structures, institutional arrangements, management practices, regulatory compliance, and decision-making processes. 

• Examine relevant national and international experiences of power sector privatization, concession agreements, and utility reforms to draw applicable lessons. 

• Identify opportunities, risks, benefits, and challenges associated with privatization and private sector participation in the selected DISCO, including the likely impact on industrial bulk power consumers (BPCs) and their energy-cost and reliability profile. 

• Assess legal, regulatory, institutional, labor, financial, and political barriers that may affect privatization and reform processes, including relevant implications for CTBCM and related market mechanisms. 

• Conduct consultations with government agencies, regulators, DISCO management, labor representatives, private investors, development partners, and other relevant stakeholders. 

• Develop privatization and reform scenarios, including PPPs, concession arrangements, and management contracts; evaluate their expected impacts and develop a roadmap with policy recommendations for implementation.

B. Industrial Green Market Readiness and MRV Assessment (Supporting Scope)

• Assess the current green market readiness of selected export-oriented industries (textile and sports apparel, min. 1 each (BPC)), including compliance status against international sustainability requirements, carbon reporting obligations, ESG standards, and green procurement criteria relevant to Pakistan's export markets.

• Analyze the institutional and regulatory barriers within current grid mechanisms; specifically wheeling charges, Use of System Charges (UoSC), stranded costs, and cross-subsidies; that restrict export industries from engaging in B2B green power purchase agreements.

• Develop an MRV-based reform monitoring approach that can be used by ADS and relevant stakeholders to track reform implementation, document progress, and verify outcomes against baseline conditions. 

• Identify policy, regulatory, and legal gaps affecting industrial green market participation; including open access provisions, wheeling charge structures, bulk consumer-seller mechanisms under CTBCM/ISMO, and tariff-related barriers; and propose targeted reform measures.

• Assess industrial MRV capacity gaps in energy consumption measurement, Scope 1 and Scope 2 emissions data, load profiling, and third-party verification readiness for bulk consumers interfacing with the selected DISCO and recommend practical MRV framework improvements.

• Develop actionable guidance on green market compliance pathways and MRV reporting improvements for export-oriented industries, aligned with international buyer requirements and globally recognized sustainability frameworks.

4. Deliverables

The consultant(s) is expected to submit the following deliverables by the end of this consultancy:

A. Power Distribution Sector Reform Deliverables

• Inception Report outlining the methodology, work plan, stakeholder engagement strategy, and timeline for the assignment. 

• Documentation of stakeholder engagement activities, including meetings, consultations, interviews, and workshops with government agencies, regulators, DISCO management, investors, and relevant stakeholders. 

• Comprehensive data collection and database of operational, financial, technical, and governance indicators of the selected DISCO. 

• Baseline assessment report (Phase 1) detailing the current performance and operational status of the selected DISCO. 

• Comparative analysis of national and international utility privatization experiences and applicable lessons learned. 

• Assessment report (Phase 2) identifying opportunities, risks, barriers, and enabling factors for privatization and private sector participation, including likely implications for industrial BPCs. 

• Development of alternative privatization and reform scenarios, including implementation strategies and investment requirements. 

• Draft Report for review and feedback, followed by a Final Report (Phase 4) incorporating all comments and recommendations. 

• Policy briefs, presentations, and advocacy documents for policymakers and stakeholders, alongside presentations at seminars and dissemination events. 

• Submission of all raw data, including datasets, interview transcripts, consultation records, and supporting documentation.

B. Industrial Green Market Readiness and MRV Deliverables

• Green Market Readiness Assessment Report (Phase 1) covering compliance gaps, international market access requirements, sustainability performance, and institutional capacity of selected export-oriented industries.

• MRV Capacity Assessment Note identifying energy data, metering, and verification deficiencies for bulk industrial consumers and proposing targeted MRV reform recommendations.

• Assessment report (Phase 2) on the current state of green market readiness within selected industrial sectors.

• Integrated policy brief on industrial green market access requirements, MRV framework improvement, and regulatory measures to facilitate renewable energy procurement and green transition for Pakistan's export sector.

• Submission of a Final Report (Phase 4) incorporating comments and recommendations from the review process.

• Submission of all raw data collected, including survey data, interview transcripts, and supporting documents.

5. Timeline

The project should be completed in all respects within 3–4 months of signing the agreement with ADS.

6. Reporting and Supervision

The consultant will report to the relevant manager and Chief Executive ADS, who will provide oversight and guidance throughout the study process. 

7. Required Qualifications of Consultant

The Lead Consultant should hold at least one of the following:

Academic Qualification

• PhD (or equivalent doctoral degree) in electrical/power engineering, energy economics, climate policy, renewable energy, finance, public policy, law, or a closely related field; OR

• Master’s degree (MS, MPhil, or equivalent) in any of the above fields, combined with a minimum of 5–7 years of directly relevant professional experience.

Professional Experience

Relevant experience should cover one or more of the following areas:

• Power sector reform, DISCO performance assessment, or utility restructuring

• Privatization, PPP/concession advisory, or private sector participation in energy

• Financial and commercial due diligence, tariff/recovery analysis, or investment assessment

• Regulatory, legal, or governance analysis in the energy sector

• ESG strategy, emissions assessment, or MRV-based green market readiness for industry

• Stakeholder consultations and engagement with government, regulators, or investors

• Knowledge of industrial bulk power consumer (BPC) needs, open access/CTBCM market implications, and MRV systems linked to industrial decarbonization and export compliance is a strong advantage.

8, How to Apply

Both individual consultants and organizations/institutions are eligible to apply. Interested applicants are requested to email the following documents at the [email protected] with the subject line: “Application – DISCO Reform and MRV Study” to Muhammad Imtiaz, Manager Finance & HR, by the end of 5th July,2026.

Technical Proposal: The Technical Proposal should present the applicant’s proposed approach and methodology for carrying out the assignment, a detailed work plan with key activities and milestones, and an indicative timeline for completion of all deliverables within the project period.

Financial Proposal: The Financial Proposal should provide a detailed cost breakdown covering all heads of expenditure, including consultancy fees, travel and field visits, data collection, reporting, and any other costs relevant to the assignment.

CV(s): Updated CV(s) of the Individual Consultant/Lead Consultant and all key team members proposed for this assignment should be included.

Note: ADS is an equal opportunity employer, striving to build a diverse and inclusive team. Therefore, it welcomes potential applicants from persons of all faiths, backgrounds, nationalities, genders, ages and orientation. 

For further details on the organization's background, thematic areas of work, ongoing initiatives, and research publications, prospective applicants and stakeholders are encouraged to visit the Alternate Development Services (ADS) website at: www.alternate.org.pk