ADB approves $300m to reform Pakistan's energy sector
The Asian Development Bank has approved a $300 million policy-based loan that will help the Government of Pakistan to address financial sustainability, governance, and energy infrastructure policy constraints in the country's energy sector.
The financing will support the first of three subprograms totaling $1 billion under the Energy Sector Reforms and Financial Sustainability Program.
The Export–Import Bank of Korea has confirmed it will provide $80 million in cofinancing for the first subprogram. “The cash shortfall across the power supply chain in Pakistan, also known as circular debt, has shot up to more than $10 billion and is a longstanding chronic issue ailing the country’s power sector,” said ADB Director General for Central and West Asia Mr. Werner Liepach.
Pakistan is yet to overcome the challenge of inefficiencies, distortions, and uneven reform progress in the sector. These inefficiencies were estimated to have cost the country’s economy up to $18 billion, or 6.5% of gross domestic product, in 2015.
