The Government of Pakistan signed a financing agreement of the Electricity Distribution Efficiency Improvement Project worth $195 million with the World Bank in Islamabad on Thursday.
Secretary of the Economic Affairs Division, Mian Asad Hayaud Din, signed the loan agreement on behalf of the Government of Pakistan while representatives of HESCO, MEPCO, and PESCO signed the project agreements. Operations Manager World Bank, Anjum Ahmad, signed the agreements on behalf of the World Bank.
The project objectives are to improve operational efficiency in targeted areas of three Electricity Distribution Companies, i.e., Hyderabad Electric Supply Company (HESCO), Multan Electric Power Company (MEPCO), Peshawar Electric Supply Company (PESCO), and achieve progress in the power sector reform agenda.
The “Electricity Distribution Efficiency Improvement Project” aims to support investment programs of three DISCOs’ to improve the reliability of electricity supply and reduce technical losses through:
- New grid stations
- Augmentation and up-gradation of existing grid stations;
- Construction, rehabilitation of transmission lines, modernization of DISCOs operations and management functions, revenue and equipment protection program, and improving operations and maintenance.
The project will also support the Power Division in fulfilling its policy mandate under the National Electricity Policy 2021 and implementing power sector reforms.
The interventions under the project are specifically aimed at improving governance, technical capabilities, safety, and commercial performance of the DISCOs to better serve their customers. The project will also support the Ministry of Energy (Power Division) to implement power sector reforms, strengthen its oversight function, and support enhancing private participation in the management of the DISCOs.
It will also contribute to the focus area on growth by improving the supply of electricity to businesses, industry, and agriculture consumers. It also has significant contributions towards achieving the goals for the focus area Green and Clean Pakistan.
Secretary EAD thanked and appreciated the World Bank management for extending continuous support to the present government to promote inclusive and sustainable economic development. On the occasion, Secretary EAD shared that even at times of the prevailing difficult situation, the Government of Pakistan kept its focus on implementing structural reforms so that the economy regains its strength.
He reiterated the government’s commitment to further strengthen implementation of reforms, including comprehensive power sector reforms focusing strongly on reducing current and future power costs, reducing reliance on imported fossil fuel, increasing renewable energy, addressing inefficiencies in distribution, and lowering subsidies in the sector by better targeting them to those most in need.