World Bank urges Pakistan to expedite $55mn power efficiency project

ISLAMABAD: The World Bank has urged Pakistan’s Power Division and three major Distribution Companies (Discos) to fast-track implementation of the Additional Financing (AF) for the Electricity Distribution Efficiency Improvement Project (EDEIP), warning that continued delays could hamper the timely and effective use of the $55 million credit facility.

In a letter addressed to Secretary Economic Affairs Dr. Kazim Niaz, the World Bank’s new Country Director for Pakistan, Bolormaa Amgaabazar, noted a significant uptick in disbursements and commitments as of June 30, 2025—with disbursements rising to $18.09 million (9.3%) from 3.6% in November 2024, and commitments to $18.28 million (20.7%) from 9.0%.

Still, the Bank flagged that targets for the quarter were not fully met due to rebidding of key contracts, procurement strategy revisions, and delays in grievance resolution.

Wolrd Bank approves $55m in additional financing to Discos

Despite these hurdles, the Bank remains optimistic. “The project is now on track to meet its development goals by closure,” the letter stated, projecting end-FY26 disbursement and commitment levels at 30% and 95%, respectively.

The World Bank lauded the Economic Affairs Division and Power Division for securing the AF package but emphasized that further momentum depends on meeting several immediate conditions—including finalizing the Financing Agreement and triggering its effectiveness within the 90-day window post-signature.

The three Discos—Hyderabad Electric Supply Company (HESCO), Multan Electric Power Company (MEPCO), and Peshawar Electric Supply Company (PESCO)—have been told to promptly roll out activities under the new funding. During the Bank’s May 2025 Appraisal Mission, all stakeholders agreed on a roadmap to eliminate project bottlenecks and enhance implementation speed.

The World Bank stressed the importance of updating the Project Enhancement Action Plan (PEAP) by July 21, 2025, to reflect on-the-ground realities and lessons learned. Similarly, the Project Procurement Strategy for Development (PPSD) must be revised in line with the Bank’s 2025 Procurement Regulations to address persistent contract delays.

Key improvements must also be made in procurement quality, bid evaluation speed, complaint management, and oversight of contract execution. All high-value contracts must incorporate rated criteria and early market engagement to ensure transparency and efficiency. Revised procurement plans and bid documents are due to the Bank by July 31, 2025.

On the Environmental and Social (E&S) front, the Bank flagged slow progress in preparing key documents like Environmental and Social Impact Assessments (ESIAs) and Resettlement Action Plans (RAPs). These are to be submitted by the end of July. The Bank warned that continued inaction could stall broader project progress.

While the capacity of Project Implementation Units (PIUs) has improved—with support from the Project Implementation and Management Support Consultant (PIMSC)—gaps remain. The Bank highlighted the need for greater stability in project teams, urging against frequent changes in PIMSC personnel. DISCOs have been instructed to submit a detailed FY26 work plan for consultant engagement by July 31 and to fill all key PIU vacancies with qualified personnel by August 31.

“With focused effort and leadership, the project can still meet its targets and deliver long-term impact on Pakistan’s power distribution performance,” the Country Director noted, reiterating the Bank’s commitment to the country’s reform agenda.

Copyright Business Recorder, 2025