World Bank Approves $825 Million Loan Package for Pakistan

The World Bank approved a package of $825 million on Tuesday to improve the national power transmission system in Pakistan and enhance health and education service delivery by strengthening financing management and procurement systems.

The Bank approved $425 million funding for the National Transmission Modernization Project-1 (NTMP-1) for a national transmission line and a $400 million Public Financial Management (PFM) reform package for enhanced health and education service delivery, according to a press release issued in Washington.

The NTMP-1 project will modernize the national transmission system to enable new power generation to reach consumers by upgrading, expanding and rehabilitating selected 500kV and 220kV substations and transmission lines.

“With a substantial volume of new generation now coming online, the strengthening of the transmission and distribution systems is critical,” says Illango Patchamuthu, World Bank Country Director for Pakistan.

The improved power supply will help meet the un-served demand from consumers and reduce the number and duration of power outages.

NTMP-1 project will improve supply reliability and lower losses in the transmission network and will also modernize the information and communication technology infrastructure as well as strengthen financial and accounting systems of the National Transmission and Dispatch Company using information technology.

This will result in more efficient operations and business decision-making processes, higher productivity and upgraded staff skills.

The NTMP is financed by the International Bank for Reconstruction and Development, part of the World Bank Group that lends to credit-worthy low and middle income countries. It is a fixed-spread loan with a maturity of 21 years, including a grace period of 6 years.

The $400 million PFM project will help address problems caused by inefficient public financial management that contribute to Pakistan’s weak performance in health and education sector. There has been substantial increase in financial resources but it fails to reach clinics and schools in time.