Power distribution, energy reforms: WB Board approves $195m financing

ISLAMABAD: The World Bank’s Board of Executive Directors approved $195 million in financing to support Pakistan in improving electricity distribution and implementing energy sector reforms to increase service quality for consumers.

The Electricity Distribution Efficiency Improvement Project (EDEIP) will help distribution companies improve operations to manage the electricity supply more efficiently and increase the reliability of the electrical grid. It focuses on cost-saving interventions to increase revenue collection and reduce losses, and on modernising operations by employing technology and information systems.

The project will also invest in climate-resilient infrastructure, particularly grid stations and transmission lines, which are critical to distribution and utility services.

“The long-term financial viability of the power sector depends on improving the efficiency of electricity distribution companies that deliver electricity to consumers,” said Najy Benhassine, World Bank Country Director for Pakistan. “These efforts will improve the operational and financial performance of select distribution companies to improve their bankability and ultimately generate more private sector participation.”

The EDEIP will support institutional reforms to improve governance and transparency and will develop systems and practices to improve managerial performance and compliance with regulatory requirements.

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In addition, the project will help build the technical capacity of the distribution companies by providing training programmes, tools, and equipment to improve staff performance in key utility operations.

“The project will focus on strengthening operations and governance of Hyderabad Electric Supply Company, Multan Electric Power Company, and Peshawar Electric Supply Company,” said Mohammad Saqib, task team leader for the project. “With the leadership of the Ministry of Energy, this project will bolster market-sector reforms, reduce transmission and distribution losses, and improve the sector’s financial performance.”

The EDEIP complements ongoing power sector support from the World Bank, including on transmission network, renewable energy generation, as well as reforms through the Pakistan Program for Affordable and Clean Energy (PACE), which focuses on improving its financial viability and transitioning to low-carbon energy.

The project will increase the reliability of electricity services for residential, agricultural, commercial, and industrial sector consumers in project areas, and will contribute to reducing carbon emissions.

Copyright Business Recorder, 2021