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World Bank Approves Loan to Support Pakistan’s Energy Sector

By 22/12/2021 March 25th, 2022 0 Comments

The World Bank has approved $195 million to support Pakistan in improving electricity distribution and implementing energy sector reforms to increase service quality for consumers. Improving electricity distribution will help companies to manage electricity supply more efficiently and increase the reliability of electrical grid stations. The institution aims to invest in climate-resilient infrastructure, particularly grid stations and transmission lines, which are critical to distribution and utility services.

The energy sector in Pakistan comprises the electricity, gas, petroleum, and coal sectors. Pakistan’s energy sector remains one of the main obstacles to the country’s economic growth. A strong energy sector is fundamental to continued socioeconomic development. Despite such importance, approximately 50% of the population of Pakistan lives without access to electricity. The increasingly high distribution and shortage of power generation results in breakouts and load-shedding. Overall Pakistan is struggling with a large gap between power supply and demand due to low investment in power generation, power theft, insufficient collection rates, and technical losses.  As a result, power generation companies face serious financial problems, making investments in the sector very difficult.

Pakistan’s energy sector needs investment to increase its efficiency and proper distribution to the consumers. The World Bank’s project will enhance the long term financial viability of the power sector by improving the efficiency of the electricity distribution companies that deliver electricity to the consumers. It focuses on cost-saving interventions to increase power generation, reduce losses, and modernise operations by employing technology and information systems. These efforts will improve the operational and financial performance of distribution companies to improve their bankability and ultimately generate more private sector participation.

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