The approval came following meetings between Pakistan’s key economic managers and top management of the World Bank and International Monetary Fund (IMF) in Washington, paving the way for rebuilding relations strained after premature ending of $11.3 billion bailout programme of the IMF.
WB had earlier approved $1.2 billion in loans.
“An amount of $350 million has been approved for the Second Punjab Education Sector Project designed to increase child school participation and student achievement,” said the WB country office on Friday.
“The Second Punjab Education Sector Project is a concessionary loan. It carries a 0.75% service charge and 1.25% interest rate and will be paid back in 25 years.”
According to the WB, a credit of $200 million sanctioned for Natural Gas Efficiency Project will enhance supply of natural gas by reducing physical and commercial losses in the gas pipeline system.
“The Natural Gas Efficiency Project includes a $100 million loan from the International Bank for Reconstruction and Development (IBRD), which is an expensive window,” said the WB.
“It is a fixed-spread loan with maturity of 23 years. The remaining $100 million is an IDA credit with the same terms as the Second Punjab Education Sector Project.”
Significant shortfalls persist in both school participation and student achievement in Punjab. To address these challenges, the Government of Punjab is implementing the Punjab Education Sector Reform Programme, which is expected to improve schooling outcomes through institutional development and strengthening, improved monitoring, and enhanced governance and accountability.
“With a target school-age population of over 12 million children, 30% of whom remain out of school and with relatively low levels of learning, continuation of our support to the government’s reform programme is critical,” said Rachid Benmessaoud, World Bank Country Director for Pakistan.
In the second phase of the programme, he said, “key focus will be on improving teacher quality and performance, which is critical for better school quality, and, thereby helping retain students in school and attract new children.”
The challenges in the gas sector are also significant. Pakistan faces severe scarcity of gas, with production failing to keep pace with demand.
Other critical challenges include inadequate allocation of gas, inefficient end-use of gas and high levels of unaccounted-for-gas (UFG).
More than 10% of gas supplied is unaccounted for, which is unaffordable and a major contributor to the gas crisis. UFG is typically at 1-2% in countries of OECD, a grouping of industrialised countries.
On Sui Northern Gas Pipelines Limited (SNGPL) system, gas losses and theft account for 11% of total supply while for Sui Southern Gas Company (SSGC) the ratio is 9%.
“Pakistan can save up to $1 billion on fuel oil import by bringing this UFG ratio to international levels,” said the WB.
The main focus of the Natural Gas Efficiency Project is to reduce UFG to about 5% by 2017 in distribution areas served by SSGC. This includes Karachi, other cities of Sindh and Balochistan.
“Results will be achieved through pipeline rehabilitation, use of cathodic protection to halt corrosion and installation of automatic pressure management systems and advanced consumer metering systems,” said Bjorn Hamso, World Bank Senior Energy Economist and project team leader.
“Key to the project’s success is to install hundreds of wholesale meters in the distribution network in such a way that network activity can be monitored on a localised level and investments can be put to use where the leakage problem is the largest and the theft problem the most severe.”
Published in The Express Tribune, April 28th, 2012.
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Where is the money going to come from. Will the students help pay it back? This is a lot of money for this. Pakistan should learn to do things on the cheap. Why is debt slavery so easily embraced?