WB’s energy loan

The World Bank has signed on to a $3 billion loan to develop energy infrastructure, aside from funding the Dasu Hydropower Project. The bank also wants its funding to support energy efficiency and conservation programmes, while expanding solar power projects across the country. The new deal expands on the bank’s existing $13 billion-plus loan portfolio in Pakistan, which is heavily slanted towards the energy sector and education, especially girls’ education and STEM (science, technology, engineering, and math) education.

According to the Minister for Power, the funding is proof of the government’s goal of ensuring sustainability in the energy sector, which may be a welcome change from several years of imbalanced and poorly planned expansion. He says the bank acknowledges the difficult decisions the government has had to take vis-a-vis the energy sector, referring to the massive increase in power tariff due to the high oil prices and weakening rupee. Since then, the government has also expanded interest in polluting but cheap fossil fuels, especially coal, which the World Bank and other international bodies have reluctantly accepted as a necessity, given the country’s precarious economic position.

However, reports suggest that top bank officials are still pushing the government to adhere to the relatively soft climate targets previously agreed upon. Like it or not, every country will have to reduce its carbon footprint, and as long as donors and financiers understand Pakistan’s unique circumstances, we should try our best to work with them.

However, there was also concerning — but somewhat expected — news on the power front, as reports suggest the IMF will force the government to roll back subsidies for the power and energy sectors. While Finance Minister Ishaq Dar had made tall claims when the subsidies were first announced, most experts saw that they were incompatible with the international lender’s loan conditions and were confounded by Dar’s dismissive approach to constructive criticism and competent but contrary opinions.

Published in The Express Tribune, November 10^th, 2022.

Like Opinion & Editorial on Facebook, follow @ETOpEd on Twitter to receive all updates on all our daily pieces.