The Asian Development Bank (ADB) and the Agence Francaise de Development (AFD) have approved over $400 million in loans to support Pakistan’s efforts to provide a more reliable and secure energy sector, a statement said on Friday.
The ADB assistance of $300 million, the third such loan under the Sustainable Energy Sector Reform programme, brings the bank’s total financing to $1 billion since 2014. AFD will add €100 million in the co-financing.
Xiaohong Yang, ADB’s country director for Pakistan, and Tariq Mahmood Pasha, secretary economic affairs division, for the government of Pakistan, signed the loan agreement. Finance Minister Ishaq Dar witnessed the signing ceremony.
Yang said, “Pakistan’s ambitious energy reform programme demonstrates the government’s commitment to improve reliability, sustainability, and affordability of the energy sector.” “Maintaining the momentum for reform will help ensure that all Pakistanis have access to electricity, while keeping the economy on an inclusive, sustained growth path,” she added.
Under the programme, Pakistan has embarked on a substantial reform initiative that will reduce energy subsidies and adjust tariff policy, improve sector performance and open the market to private participation, and increase accountability and transparency.
The reform measures aim at addressing the financial viability and reduce costs to taxpayers. Specific measures included recently agreed legislation that will improve governance through more clearly defined roles for both the government and the energy sector regulator, and reduce debt levels in the energy sector.
“As co-financing partner in the reforms project, AFD is committed to promoting green energies in Pakistan through investments in low carbon emission energy generation in line with COP21 Paris agreement approved by the Parliament of Pakistan,” said Jacky Amprou, AFD country director for Pakistan.
The ADB is Pakistan’s largest development partner in the energy sector with a focus on investments, reforms to strengthen governance and promote structural transformation, effective implementation of projects and programmes, capacity development, and promotion of regional power and gas trading initiatives.
ADB and AFD are committed to support the government of Pakistan’s strategy to resolve the energy crisis and to fight climate change, including through Vision 2025, Pakistan’s comprehensive plan for economic growth.
The plan aims at increasing the power generation, provide uninterrupted electricity to all, and improve demand management. The Manila-based ADB is dedicated to reduce poverty in Asia and the Pacific through inclusive economic growth, environmentally sustainable growth, and regional integration. Established in 1966, the bank is celebrating 50 years of development partnership in the region. It is owned by 67 members — 48 from the region. In 2016, the ADB assistance amounted to $31.7 billion, including $14 billion in co-financing.