World Bank approves $195 million loan to improve power distribution system

The long-term financial viability of the power sector depends on improving the efficiency of electricity distribution companies that deliver electricity to the consumers,” World Bank country director for Pakistan Najy Benhassine said.

“These efforts will improve the operational and financial performance of select distribution companies to improve their bankability and ultimately generate more private sector participation.”

The EDEIP will support institutional reforms to improve governance and transparency and will develop systems and practices to improve managerial performance and compliance with the regulatory requirements.

In addition, the project will help build the technical capacity of the distribution companies by providing training programmes, tools, and equipment to improve staff performance in key utility operations. “The project will focus on strengthening operations and the governance of Hyderabad Electric Supply Company, Multan Electric Power Company, and Peshawar Electric Supply Company,” task team leader for the project Mohammad Saqib said.

“With the leadership of the Ministry of Energy, this project will bolster the market-sector reforms, reduce transmission and distribution losses, and improve the sector’s financial performance.”

The EDEIP complements the ongoing power sector support from the World Bank, including transmission network, renewable energy generation, as well as reforms through the Pakistan Programme for Affordable and Clean Energy (PACE), which focuses on improving its financial viability and transitioning to low-carbon energy.

The project will increase the reliability of electricity services for residential, agricultural, commercial, and industrial sector consumers in project areas, and will contribute to reducing carbon emissions.

Pakistan has been a member of the World Bank since 50s. Since then, the World Bank has provided $40 billion in assistance. The World Bank’s programme in Pakistan is governed by the Country Partnership Strategy for FY2015/20 with four priority areas of engagement: energy, private sector development, inclusion, and service delivery. The current portfolio has 58 projects and a total commitment of $13.8 billion.

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