Power and governance loan

The recent signing ceremony held in Islamabad between the World Bank, the Asian Infrastructure Investment Bank (AIIB) and the Government of Pakistan finalised loan and grants worth a whopping $720 million to be invested in hydroelectric power projects as well as governance and policy programmes in Pakistan. This is an exciting news as the country grows in terms of infrastructure and foreign economic interest. Bearing in mind that this is a loan, and not a handout, the government will have to ensure complete transparency as to how the funds are allocated, especially because they will have to be paid back. The government’s energy policy to reduce power cuts and improve the power sector has been there for several years but only now are we seeing any plans effectualising.

Almost 96% of the $720 million is to be spent on the 1,410 megawatt Tarbela Extension Hydroelectric Power Project. This would, in turn, cover about 84% of the $823.5 million project with the remainder pledged by two state-owned companies. The Tarbela project has had silting issues for the past two decades which has reduced its storage capacity and efficacy. One wonders if these funds would be better utilised in smaller hydel projects spread across the country, which have proven to be much more efficient than large-scale projects. The interruption in one large project on the national grid is much more pronounced than interruptions caused in a smaller project spread out over a larger area. Planning, research, and development have not been utilised and executed efficiently by those in power in this country’s economic history. Effective use of funds should be made with resources poured into the most important projects and with meticulous planning. The current government has focused almost all of its energies on economic development with much criticism because there are many more fragile issues confronting the country but it is now vested and we expect that this new loan will be used earnestly by the Nawaz Sharif Administration.

Published in The Express Tribune, January 30^th, 2017.

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