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ADB's 1.4 bln USD financing to help Pakistan resolve power crisis

Xinhua, November 20, 2015 Adjust font size:

The Asian Development Bank (ADB) has approved combined loan assistance of nearly 1.4 billion U.S. dollars for two programs that will help Pakistan resolve some of the key issues in the power sector, allowing it to lift growth, boost incomes, and cut poverty, the ADB said on Friday.

The 990-million-dollar multitranche Second Power Distribution Enhancement Investment Program will introduce an Advanced Electricity Metering Infrastructure (AMI) system for power distribution companies across the country,

The system will help reduce losses, improve revenue collection and load management, and strengthen the financial viability of the sector.

The 400 million dollars loan for the second subprogram of the Sustainable Energy Sector Reform Program supports ongoing policy reforms, which aims to build an affordable and secure energy sector.

Pakistan is struggling with an ongoing power crisis which puts pressure on real GDP growth. The electricity supply-demand gap of 5,000 megawatts is blamed for a sharp decline in manufacturing.

Prime Minister Nawaz Sharif said that his government will end power shortage by 2018 when he completes his five-year term.

The authorities still observe hours of power load-shedding across the country even in winter in view of the power shortage.

"Nearly 20% of generated electricity is lost due to high technical and commercial losses and measures like the installation of the AMI system are necessary to counter this," said Adnan Tareen, a senior energy specialist.

"The two programs, collectively, will help create a more efficient, transparent, modern and sustainable energy sector."

The government of Pakistan - with ADB as its lead donor partner - has been taking a number of measures to overhaul and reform the sector, but inefficiencies and gaps remain due to the growing demand for electricity.

Distribution power companies face financial problems with customer tariffs being lower than the cost of service, and high system losses resulting in delayed payment to generating companies. Enditem