Electricity Distribution Efficiency Improvement Project: Agreements worth $195m signed with WB
ISLAMABAD: The government of Pakistan signed financing agreements of Electricity Distribution Efficiency Improvement Project worth $195 million with the World Bank, here on Thursday.
Mian Asad Hayaud Din, secretary, Economic Affairs Division signed the loan agreement on behalf of the Government of Pakistan, while representatives of the Hyderabad Electric Supply Company (Hesco), the Multan Electric Power Company (Mepco), and the Peshawar Electric Supply Company (Pesco) signed the project agreements.
Anjum Ahmad, operations manager, World Bank 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. Hesco, Mepco, Pesco, and achieve progress on the power sector reform agenda.
The “Electricity Distribution Efficiency Improvement Project” aims to support investment programmes of three DISCOs’ to improve reliability of electricity supply and reduce technical losses through; (a) new grid stations; (b) augmentation and upgradation of existing grid stations; (c) construction, rehabilitation of transmission lines, modernization of DISCOs operations and management functions, revenue and equipment protection programme, 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 implement power sector reforms.
The interventions under the project specifically aim at improving governance, technical capabilities, safety, and commercial performance of the DISCOs to better serve their customers.
Power distribution, energy reforms: WB Board approves $195m financing
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 focus area on growth by improving 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.
The secretary, EAD appreciated the World Bank management for extending continuous support to the present government to promote inclusive and sustainable economic development.
At the occasion, the secretary, EAD shared that, even at time of 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.
The World Bank’s Board of Executive Directors had approved $195 million in financing to support Pakistan in improving electricity distribution and implementing energy sector reforms to increase service quality for consumers last week.
“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 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.”
Copyright Business Recorder, 2021
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