The three core segments within the power sector are generation, transmission and distribution. Prior to the privatization of KESC in 2005, transmission and distribution was solely held within the public sector. Today KESC is the sole private sector company involved in transmission and distribution, alongside the public entity of WAPDA. However, power generation has active participation from the private sector.

Pakistan's power generation sector is predominantly a mix of thermal and hydel units dominated by WAPDA and KESC. KESC supplies electricity to the city of Karachi and WAPDA to the rest of the country. The Pakistan Atomic Energy Commission ("PAEC") is responsible for the execution of development projects involving nuclear power stations and the generation of electric power. At present, there are two nuclear power plants, Karachi Nuclear Power Plant ("KANUPP") and Chashma Nuclear Power Plant ("CHANUPP"). In addition, there are 29 IPPs and the electricity produced by them is sold to and distributed by the NTDC (a subsidiary of WAPDA).

WAPDA's Strategic Plan approved by the Government of Pakistan in 1992 provided the roadmap of the future structure of Pakistan Power Sector. The plan envisaged a staged transition from monopoly operations of WAPDA to a competitive electricity market by requiring GoP to restructure WAPDA into decentralized business units.

As part of this process, the GoP has restructured WAPDA into the following separate units; 
  1. Four generation companies ("GENCOs") formed from WAPDA's 11 thermal generation plants.
  2. The National Transmission and Dispatch Company ("NTDC") formed from the National Grid Company to operate the transmission system and to control dispatch.
  3. Nine distribution companies ("DISCOs") formed from WAPDA's area electricity boards.
  4. A separate entity Pakistan Electric Power Company ("PEPCO") was created in 1998 as private limited company 100% owned by the Government of Pakistan with a specific mandate to restructure and corporatize WAPDA's existing power functions into 12 companies.
  5. WAPDA was made primarily responsible for the development of hydel power and water sector projects.

Part two of this process involved the divestment of these companies to strategic investors. As a first step, KESC, which is responsible for the generation, transmission and distribution of electricity in the city of Karachi and its adjoining areas, was privatized in 2005 and at present it is under the management of Dubai-based Abraaj Capital.

The diagram below exhibits the power industry structure in Pakistan.