ISLAMABAD – The World Bank has canceled a loan of $500 million to Pakistan due to non-compliance with key conditions, including revising the electricity purchase agreements under China-Pakistan Economic Corridor (CPEC) project.
Reports said one of the main reasons for not providing the new budget support loan is that Pakistan has largely exhausted its quota.
The $500 million loan, which has been canceled, aimed at ensuring provision of affordable and clean energy to Pakistan.
In June 2021, the World Bank approved a cooperation program with Pakistan for the energy sector and provided the first tranche of $400 million. However, there were further conditions for releasing more funds.
These conditions included negotiations with all IPPs (Independent Power Producers), as well as setting up Chinese power plants under CPEC.
There has been no progress in the negotiations with CPEC power plants, reports quoted officials having said.
