Funding for energy efficiency project: EAD asked to get firm World Bank commitment

ISLAMABAD: The Central Development Working Party (CDWP) has directed Economic Affairs Division (EAD) to get firm commitment of $150 million funding from the World Bank (WB) for energy efficiency and conservation project to be executed by National Energy Efficiency Conservation Authority (NEECA).

At a recent meeting of CDWP, presided over by Deputy Chairman, Planning Commission, Chief Energy (Power), MoPD&SI appraised the forum that the sponsoring agency of the project has recently been changed from M/o Science and Technology to Ministry of Energy (Power Division).

Initially, the proposal was discussed in CDWP on 6th February, 2023. The forum agreed, in principle, with the concept. The sponsors were instructed to update the proposal in the light of observations of the forum and resubmit it after clearance from Inter-Ministerial Steering Committee for consideration/ confirmation.

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Chief Energy (Power) further informed that the cost of $150 million is proposed to be financed through World Bank. The scope of the project includes 4 components, i.e., transitioning to energy efficient buildings ($50 million), enhancing the capacity of NEECA to aid the implementation of the NEECA policy and Action Plan ($15 million), shifting from gas to electricity in the commercial, industrial and residential sectors ($65million) and de-risking EE&C investments and mobilising private sector financing ($20million).

Chief Energy (Power) pointed out that previously CDWP directed NEECA to reduce the implementation period from 10 to 3 years. However, in the revised Concept Proposal, implementation period has been reduced to 5 years instead of 3 years by the sponsors.

To a query by the Chair, Additional Secretary, Power Division informed that the proposal was agreed, in principle, by the CDWP. It was; however, referred to Inter-Ministerial Steering Committee headed by Shahid Khaqan Abbasi, former PM. The Committee accordingly cleared the revised Concept proposal.

Senior Chief (Energy) pointed out that status of commitment of World Bank for the proposed funding of $I50 million including $15 million as grant and $135 million as loan along with terms and condition may be shared by EAD.

Moreover, being major stakeholders, the role of Provincial Energy Efficiency & Conservation authorities in implementation of the project activities may be incorporated in the project proposal.

To another query by the Chair, the representative of EAD informed the forum that World Bank has not given firm commitment for the proposed funding.

The project is not part of the World Bank existing pipeline projects. EAD will; however, make efforts to secure funding from the World Bank for the project.

Chair asked about NEECA’s handling at the Ministry level. Additional Secretary Power Division noted that project relates to development sector.

It will be looked after by the Joint Secretary (Development) at Ministry level. Chief Economist, Planning Commission observed that NEECA is an independent authority and the MD may be fully empowered to execute its project. The Chair observed that NEECA’S mandate is wide ranging.

The Chair remarked that the government needs energy efficiency and conservation measures to reduce current energy crisis.

Moreover, Pakistan, despite being net importer of energy resources, has not been able so far to exploit its full energy conservation potential. He advised EAD to obtain firm commitment of the World Bank for financing of the project which is vital for energy conservation and efficiency in the country.

The CDWP cleared the Concept Proposal at a cost of $ 150 million with the direction that Economic Affairs Division (EAD) will confirm financing commitment from the World Bank.

Copyright Business Recorder, 2023