$150m ‘energy efficiency’ loan okayed
photo: file
Pakistan, on Monday, approved the acquisition of $150 million in financial assistance from the World Bank for energy conservation and capacity building of its officers, continuing its policy of funding activities with foreign money despite the growing debt burden.
The Central Development Working Party (CDWP), the body responsible for clearing development schemes and their concept papers, authorised the acquisition of the $150 million World Bank package for energy efficiency and conservation. This package includes a $135 million loan and the rest of the amount as a grant.
Pakistan will pay a 2% interest on the $135 million loan, and an additional $15 million is expected to be provided in the form of a grant for technical assistance. The loan is being taken by the Ministry of Science and Technology for an energy efficiency and conservation project.
The project will be implemented over a period of five years with the aim of transitioning existing buildings into energy-efficient structures. A significant portion of the loan money will be allocated to enhancing the capacity of the National Energy Efficiency and Conservation Authority.
Furthermore, the project funds will be used to facilitate the shift from gas connections to electricity connections for domestic, industrial, and commercial consumers, showed details.
Pakistan’s debt burden has become unsustainable due to its policies of overspending, a consumption-led economic growth model, and a donor-driven and dependent approach to issues that do not require external financing.
As much as 88% of the Federal Board of Revenue (FBR)’s projected revenues of Rs9.415 trillion are expected to be spent on interest payments on loans during the current fiscal year. Despite the alarming situation, there appears to be no shift in the current policy of securing foreign loans for activities that do not generate sufficient resources for repayment.
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The plan indicates that $50 million will be spent on transitioning to energy-efficient buildings, $65 million will be spent on shifting from gas to electricity connections in the commercial, residential, and industrial sectors, and $15 million will be spent on the capacity building of officers. All these activities are not expected to generate resources that can be used to repay the borrowed sums.
The CDWP also approved two development projects worth Rs2.42 billion during its meeting held on Monday, under the Deputy Chairmanship of the Planning Commission, Dr Mohammad Jehanzeb Khan.
The forum cleared a programme for flood response through the Reconstruction of Education Facilities in Sindh worth Rs1.6 billion. A project for the operational improvement of the Federal Investigation Agency (FIA) in the counter-terrorism area was also approved at a cost of Rs858.6 million.
These projects have been approved at a time when the government is planning to streamline the Public Sector Development Programme by focusing on strategically more important projects.
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The government of Sindh will fund the Rs1.6 billion flood project. To address the need to reduce dropouts and increase enrolment, the government plans to establish at least 500 elementary schools in the province.
This project is conceived in view of the fact that the number of elementary schools is much lower than primary schools in rural Sindh. This particular issue adversely affects the retention of primary school students and is the leading cause of dropouts. Similarly, the net enrolment rate for girls is low.
The forum also approved the Operational Improvement of the FIA in AML/CFT, Counter-Terrorism Wing & Case Management System, valued at Rs858.6 million.
The Ministry of Interior is the sponsoring agency for the project, which aims to revamp the Counter-Terrorism Wing. Its objectives also include the enforcement of the Anti-Terrorism Act, dealing with transnational and inter-provincial mandates to combat terrorism and terrorist financing, identifying criminal networks that recruit, engage, and hire Pakistani youth.
The project will also focus on efforts to remove Pakistan from the grey list, according to a press statement issued by the Ministry of Planning. However, the statement did not mention the grey list, as Pakistan exited the grey list over two years ago.
The planning ministry stated that the project will also address national and transnational terrorism threats, enhance overall security at national, regional, and global levels, improve mechanisms for assessing terrorism threats at the national level, achieve international standards of transparency and accountability through a state-of-the-art law enforcement agency, assess, scrutinise, and disseminate financial intelligence shared by FMU, and efficiently prosecute criminals and perpetrators, accomplices, and others linked to money laundering and terrorist financing.
All these activities do not fall under the definition of development and should be funded from the current budget of the interior ministry.
Published in The Express Tribune, September 26th, 2023.
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