ISLAMABAD – The World Bank has approved a $195 million loan for cash-strapped Pakistan to improve electricity distribution and implement energy sector reforms to increase service quality for consumers.
A statement issued by the Washington-based international financial institution cited that the Electricity Distribution Efficiency Improvement Project (EDEIP) will help distribution companies improve operations to manage the electricity supply more efficiently and increase the reliability of the electrical grid.
It focuses on cost-saving interventions to increase revenue collection and reduce losses, and on modernizing operations by employing technology and information systems, the statement also reads.
“The project will also invest in climate-resilient infrastructure, particularly grid stations and transmission lines, which are critical to distribution and utility services.”
World Bank Country Director for Pakistan Najy Benhassine said the financial viability of the power sector depended on improving the efficiency of electricity distribution companies that delivered electricity to consumers.
“These efforts will improve the operational and financial performance of select distribution companies to improve their bankability and ultimately generate more private sector participation,” he added.
Electricity Distribution Efficiency Improvement Project will support institutional reforms to improve governance and transparency and will develop systems and practices to improve managerial performance and compliance with regulatory requirements.
The project will also assist in building the technical capacity of the distribution companies by providing training programs, tools, and equipment to improve staff performance in key utility operations.
EDEIP’s team leader said the project would focus on strengthening operations and governance of Hyderabad Electric Supply Company, Multan Electric Power Company, and Peshawar Electric Supply Company.
He also added that the EDEIP complements ongoing power sector support from the World Bank, including on transmission network, renewable energy generation, as well as reforms through the Pakistan Programme for Affordable and Clean Energy (PACE), which focuses on improving its financial viability and transitioning to low-carbon energy.
The project aimed to curb reducing carbon emissions and it will increase the reliability of electricity services for residential, agricultural, commercial, and industrial sector consumers in project areas.
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