The loan is approved to support the government of Pakistan's ongoing reforms to tackle the country’s chronic energy crisis. PHOTO: PID/FILE
However, the remaining amount has been linked with the government’s ability to withdraw power subsidies and ensure accountability in the power sector.
It was the first programme loan that the Manila-based lending agency has approved in the last six years and the first tranche that is cleared after a gap of four years.
The ADB is expected to disburse the entire amount next week, following a signing ceremony between both sides, scheduled for Monday.
The approval comes at a time when the government is planning to introduce a new schedule of lengthy load shedding, as it struggles to meet the soaring demand with increasing temperature in the country.
In September the ADB had approved a $2.1 billion Accelerating Economic Transformation Programme. However, the programme was suspended after disbursing two tranches - the last one came in 2010 due to the previous government’s inability to meet conditions attached with the loan package.
The loan is approved to support the government of Pakistan's ongoing reforms to tackle the country’s chronic energy crisis which has crippled industries and caused social unrest, according to a handout issued by the ADB.
The handout also added that the full programme is expected to total $1.2 billion, “with future amounts subject to further discussions between the ADB and the government”.
Branded as Sustainable Energy Sector Reforms Programme, the loan will support the overhaul of existing tariffs and subsidies as the government moves to eliminate subsidies by 2016, except for low income customers.
It will also back reforms to reduce power losses and encourage more sector involvement from the private sector, as well as improving transparency and accountability.
To supplement the ADB’s first tranche, Japan will provide $49 million while the World Bank is also expected to give $600 million for the energy sector.
COMMENTS (5)
Comments are moderated and generally will be posted if they are on-topic and not abusive.
For more information, please see our Comments FAQ
Faqeer !!!
Both PPP and PMLN made pakistan a beggar state getting loans. Where these loans are spent? $130bn debt of Pakistan and where is that money? No electricity, no water, no gas and no public infrastructure only Royal palaces and estates abroad
This temporary efforts won't help. Government is the authority but is there someone to ask Government that who would pay the loans plus the interest in future. Has Government planned for that?
There is a hollywood film named after Pakistan. Its called "The Loan Ranger"
Sharif & Company acquiring loan from every place they know in their text book BUT the biggest question is this that who will pay this loan in future? With no particular strategy for increasing exports, these loans will destroy the reserve position at time of payment.With no mega constructive project in pipeline, either this gov or next government will take another loan to retire this loan. Taking loan is not that difficult as compare to retiring it off. Dar sahib please take some advisory services from an economist.