A delegation of World Bank (WB) officials led by the Vice President for South Asia Hartwig Schfer, meet the top officials of the Ministry of Energy on Wednesday.
The delegation discussed energy sector reforms and a potential course of action for Pakistan to control the worsening circular debt.
The Special Assistant to Prime Minister (SAPM) on Power and Petroleum, Tabish Gauhar, attended the meeting along with Secretaries of the Power and Petroleum Divisions. Country Director Pakistan Najy Benhssine, Pakistan Executive Director at the WB Naveed Kamran Baloch, and other senior officials also attended the meeting.
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The WB delegation discussed the reforms for the ongoing projects that the bank has funded. Both sides discussed the challenges in the energy sector and deliberated upon measures to improve the performance of the gas and power sectors. The performance of the distribution companies was also discussed during the meeting.
Matters related to WB-funded ongoing projects in the energy sector were discussed during the meeting. SAPM Gauhar has already written a letter to the Minister for Energy, Hammad Azhar on the energy sector reforms. The Ministry of Energy will submit a circular debt plan to the WB and the International Monetary Fund (IMF). However, the plan has not been finalized due to two main points that still need to be decided by the Ministry of Finance – the expected subsidy for the next year and the proposed increase in tariffs for the next year.
The delegation was informed that effective measures by the government were aiding in the reduction of the circular debt by a significant amount.
Minister Azhar said that the circular debt had decreased by Rs. 408 billion in the previous financial year. He added that an increase of nearly 20 percent has been observed in the peak demand for electricity in the summer months this year, which is a good indicator for the energy sector and the economy.
He informed the WB officials that the Power Division is planning to add a lot more capacity to the existing transmission network during the current fiscal year, and said that funds have already been allocated for this capacity building.
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The minister underscored the importance of the WB’s assistance in the expansion and modernization of Pakistan’s electricity transmission system.
The WB officials commended the efforts of the Ministry of Energy in countering the growth of the circular debt. They also assured the government of their continued cooperation in the energy sector.