WASHINGTON DC, November 12, 2015 ─ The World Bank Group
approved the Second Development Policy Credit (DPC- II) worth US$500
million to support Pakistan’s energy reforms today. This operation
focuses on structural reforms to the electric power sector that will
improve its financial, technical and commercial performance.
The first operation that was approved in May last year, reflected
prior actions taken by the government to support the most pressing needs
to stabilize the sector, while the second operation in the series works
towards longer term structural reforms that are aimed at restoring the
viability of the electric power sector.
“This operation will further support the country’s efforts in
overcoming the energy crisis. It supports Government of Pakistan to
implement key reforms towards an efficient and consumer-oriented
electric power system,” says Patchamuthu Illangovan, World Bank Country Director for Pakistan. “The reforms are aimed at meeting the needs of the country and its people and economy sustainably and affordably.”
The Power DPC-II focuses particularly on...
policy and institutional
actions that will improve financial viability and thus reduce the burden
of public financing for the sector. The programmatic operation is
structured around three objectives:
Reducing general subsidies and improving tariff policy. It is
essential to reduce across-the-board subsidies, make them more
transparent and target them better if the sector is to become
financially viable and the government’s fiscal position is to improve.
Improving sector performance and opening the market to private participation.
This will help increase the supply of gas through better and more
transparent pricing, and move the electricity sector towards market
oriented commercial operation, thus opening it up for privatization.
Ensuring accountability and transparency. Better monitoring,
governance, transparency and rigor in reporting of results in the energy
sector are important for implementation of reform and to ensure broader
stakeholder support for reforms.
“This second operation builds on the achievements of the first”, says Richard Spencer, Lead Energy Specialist. “The
reforms undertaken by the government will have marked economic impacts
by bringing better governance and regulation to the sector. Its
efforts towards making all the cash flows into the sector transparent so
that people are accountable will benefit the power sector in the long
run.”
