The Dawood Story: HUBCO, Engro, and the Thar Coal Plants
Pakistan's largest private power empire, the family that runs it, and the Rs. 23.2 billion bond settlement that paid them from future Pakistani sovereign debt
By Asad Baig · Lahore · April 2026 · Approx. 7-min read
The largest private power empire in Pakistan
Hussain Dawood is, by any biographical measure, an impressive figure. Educated at the University of Sheffield and the Kellogg School of Management. Member of the World Economic Forum since 1992, the first Pakistani to achieve that status. Awarded Pakistan's Hilal-i-Imtiaz in 2025. Recipient of an honorary award from the Republic of Italy. Tragic personal history. He lost his son and grandson in the 2023 Titan submersible implosion.
He is also the chairman of Pakistan's largest private power empire.
This article is about that empire. How it was built. What it owns. What it collects from the Pakistani state. And how it has positioned itself to be paid not just from current revenues but from future bonded debt of the Pakistani state.
How the Dawood empire was rebuilt
The Dawood family had been one of Pakistan's most prominent business houses in the 1960s, before Bhutto's 1970s nationalisation devastated their holdings. Many of the family's industrial assets were taken into state control during that period.
The post-2002 reconstruction of Dawood Hercules Corporation, and the subsequent acquisition of controlling stakes in Engro Corporation in the late 1990s and early 2000s, returned the family to commercial prominence.
In 2012, the Dawood Group acquired control of HUBCO, Pakistan's first major private power plant, from National Power International Holdings. From that point, the Dawood-Engro complex became Pakistan's largest private power producer.
The plants
The combined Dawood-Engro power portfolio:
| Plant | Capacity | Fuel |
|---|---|---|
| Hub Power (HUBCO) | 1,292 MW | Furnace oil |
| HUBCO Narowal | 220 MW | Diesel / RFO |
| ThalNova Thar Coal | 330 MW | Thar coal |
| HUBCO Thar Coal | 330 MW | Thar coal |
| Engro Thar Coal | 660 MW | Thar coal |
| New Bong Escape Hydropower | 84 MW | Hydro |
| Tenaga Generasi Wind | 49.5 MW | Wind |
The Thar coal plants are particularly significant. They were positioned as a strategic asset for Pakistani energy independence, using domestic coal reserves rather than imported fuel. The framing was nationalistic. The financial structure was the same upfront tariff model with capacity payment guarantees that defines every IPP in Pakistan.
The Rs. 46 billion for zero electricity
In FY2023-24, HUBCO and KAPCO together received approximately Rs. 46 billion in capacity payments from the Pakistani government. In that same year, those two plants produced exactly zero units of electricity.
Read that line again. Two specific power plants received Rs. 46 billion in capacity payments while generating zero units of electricity.
The figure was confirmed publicly by Gohar Ejaz, the former federal minister, in July 2024. He showed the data on television. Nobody disputed it. Because nobody could.
This is what take-or-pay produces in practice. The plant is paid for its existence, not for its output. The contract is honoured regardless of whether the plant operates. The Pakistani consumer pays the bill, monthly, in their per-unit tariff.
I have written about how take-or-pay works at What Is a Take-or-Pay Contract? and about the broader capacity payment mechanism at Capacity Payments in Pakistan.
The 2021 circular debt settlement
In 2021, HUBCO alone received approximately Rs. 23.2 billion in the circular debt settlement, divided into cash, 5-year bonds, and 10-year bonds.
What this means in practice is consequential. The Dawood-Engro complex has successfully achieved a position where it is being paid not just from current Pakistani government revenues but from future bonded debt of the Pakistani state.
When you pay your electricity bill in 2026, you are paying for HUBCO's current capacity charges. When the Pakistani government services those circular debt bonds in 2031 and 2036, future Pakistani taxpayers will be paying additional amounts that flow through the same financial structure to the same family.
The temporal extension of the obligation is, in some ways, more concerning than the immediate capacity payment. A capacity charge ends with the contract. A bond obligation extends for the bond's duration, payable from general government revenues, regardless of whether the underlying power generation continues.
WHAT THE 2021 SETTLEMENT MEANS
HUBCO received Rs. 23.2 billion in cash and bonds in the 2021 circular debt settlement. The bond portion will be paid by future Pakistani taxpayers, through general government revenues, in 2031 and 2036. The Dawood-Engro complex is being paid not just from current revenues but from future bonded debt of the Pakistani state.
Where the broader empire goes
Beyond the power plants, the Dawood-Engro complex extends across:
- Engro Corporation, fertilisers, foods, polymers, telecommunications infrastructure
- Engro Polymer & Chemicals, petrochemicals
- Engro Foods (now FrieslandCampina Engro Pakistan), dairy products
- Dawood Hercules Corporation, fertiliser holding company
- Multiple cross-holdings, across financial services, energy infrastructure, and industrial subsidiaries
The portfolio diversification is, in itself, not the issue. Wealthy families build portfolios. The issue is the structural advantage that the IPP capacity payments provide.
A typical industrial business operates in competitive markets where its profits depend on its ability to deliver products customers want at prices they will pay. Capacity payments under take-or-pay contracts operate on a different basis. The IPP receives payment regardless of whether the customer (the Pakistani grid) actually uses what the plant produces. This guaranteed cash flow underwrites the broader commercial empire in a way that competitive market enterprise cannot match.
Why I name names
Some readers might ask why I specifically name the Dawood family in an article about Pakistan's electricity crisis. There are two reasons.
First, the family's commercial position in Pakistan's power sector is documented, not alleged. The plant ownership is in NEPRA filings. The capacity payments are in CPPA-G records. The 2021 circular debt settlement was a publicly reported financial transaction. None of this requires investigation. It is in the public record.
Second, the architecture of capacity payments cannot be discussed in the abstract. The system works because specific plants receive specific payments under specific contracts. Naming the plants and their owners is what allows readers to understand the system as a system, rather than as a vague macroeconomic concept.
Hussain Dawood and the Dawood family are well-positioned to defend their commercial conduct. They have multiple platforms (the courts, the media, official statements) through which to respond. The work of citizens is to hold institutions and individuals accountable on the basis of public records. The work of those institutions and individuals is, when needed, to defend themselves with facts. Both are legitimate. Neither should be silenced.
The intent throughout has been to inform, not to defame. To document, not to attack.
What you should take away
Three things to remember about the Dawood story.
The Dawood-Engro complex is the largest private power producer in Pakistan. Not the wealthiest individual owner (that is the Mansha family). The largest by combined plant capacity and capacity payment receipts.
HUBCO and KAPCO received Rs. 46 billion in FY2023-24 for zero electricity. This is the most concrete illustration of how take-or-pay works at the level of specific plants. The plants did not produce. The payments were made anyway.
The 2021 circular debt settlement extended the obligation into future bonded debt. Future Pakistani taxpayers will pay HUBCO bond obligations in 2031 and 2036. The temporal extension of capacity-payment obligations through bonds is a feature of the system that has not received enough public attention.
The Dawood family is one of forty I profile in The 40 Families Who Own Pakistan's IPPs. Their power-sector position is the largest by combined private capacity.
Now you know it. Pass it on.
Thank you for reading.
, Asad Baig, Lahore, April 2026
Frequently asked questions
Who owns HUBCO? HUBCO is controlled by the Dawood Group, which acquired it from National Power International Holdings in 2012. The Dawood Group, through Hub Power and associated companies (Engro, ThalNova), is now Pakistan's largest private power producer.
What is the combined capacity of Dawood Group power plants? Approximately 2,966 MW across HUBCO (1,292 MW), HUBCO Narowal (220 MW), ThalNova Thar Coal (330 MW), HUBCO Thar Coal (330 MW), Engro Thar Coal (660 MW), New Bong Escape Hydropower (84 MW), and Tenaga Generasi Wind (49.5 MW).
What did HUBCO and KAPCO receive in FY2023-24? Approximately Rs. 46 billion combined in capacity payments while generating zero units of electricity. Confirmed publicly by Gohar Ejaz, former federal minister, in July 2024.
What was the 2021 circular debt settlement for HUBCO? HUBCO alone received approximately Rs. 23.2 billion, divided into cash, 5-year bonds, and 10-year bonds. The bond portion will be paid by future Pakistani taxpayers through general government revenues in 2031 and 2036.
Why are the Thar coal plants significant? The Thar coal plants (HUBCO, ThalNova, Engro) use domestic Thar coal reserves rather than imported fuel. They were positioned as strategic energy independence assets. Their financial structure follows the same upfront tariff model with capacity payment guarantees as other Pakistani IPPs.
Are the Dawood plants part of CPEC? The Engro Thar Coal plant has CPEC associations through Chinese partnership in mining and construction (China Machinery Engineering Corporation). The other Dawood plants are not formally CPEC entities, though several involve Chinese equipment and technology.
Sources and notes
- Power Sector Inquiry Report 2020, Government of Pakistan, headed by Muhammad Ali, former SECP Chairman (ARY News mirror)
- Gohar Ejaz public data release on IPP capacity payments (July 2024)
- NEPRA tariff filings and licensing records (nepra.org.pk)
- CPPA-G IPP lists (cppa.gov.pk)
- Karachi Stock Exchange / PSX disclosures of HUBCO, Engro Corporation, Engro Powergen
- Dawn, Most of IPPs owned by 40 Pakistani families, groups (22 July 2024)
- Hussain Dawood biographical information from World Economic Forum and published interviews
Related reading from Asad Baig
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- Nadeem Babar: The Architect Inside, and the Oursun Solar Tariff
- Why Does a Fugitive's Power Plant Still Get Paid by the Pakistani State?
Asad Baig