WB approves US $500 mln to support energy reforms in Pakistan

ISLAMABAD, Nov 13 (APP): World Bank approved the second Development Policy Credit (DPC-II) worth US $500 million to support Pakistan’s energy reforms.
This operation focuses on structural reforms to the electric power sector that will improve its financial, technical and commercial performance, said a statement of the World Bank.
The first operation that was approved in May last year,
reflected prior actions taken by the government to support the most
pressing needs to stabilize the sector, while the second operation
in the series works towards longer term structural reforms that are
aimed at restoring the viability of the electric power sector.
“This operation will further support the country’s efforts in
overcoming the energy crisis.It supports Government of Pakistan to
implement key reforms towards an efficient and consumer-oriented
electric power system,” Patchamuthu Illangovan, World Bank
Country Director for Pakistan said.
He said the reforms are aimed at meeting the needs of the
country and its people, economy sustainably and affordably.
The Power DPC-II focuses particularly on policy and
institutional actions that will improve financial viability and
thus reduce the burden of public financing for the sector.
The programmatic operation is structured around three
objectives.
First to reducing general subsidies and improving tariff
policy.
It is essential to reduce across-the-board subsidies, make
them more transparent and target them better if the sector is to
become financially viable and the government’s fiscal position is to
improve.
Second to improve sector performance and opening the market to
private participation.
This will help increase the supply of gas through better and
more transparent pricing, and move the electricity sector towards
market oriented commercial operation, thus opening it up for
privatization.
Third to ensure accountability and transparency.
Better monitoring, governance, transparency and rigor in
reporting of results in the energy sector are important for
implementation of reform and to ensure broader stakeholder support
for reforms.
“This second operation builds on the achievements of the
first”, says Richard Spencer, Lead Energy Specialist.
“The reforms undertaken by the government will have marked
economic impacts by bringing better governance and regulation to the
sector.Its efforts towards making all the cash flows into the
sector transparent so that people are accountable will benefit the
power sector in the long run”, he added.