ISLAMABAD (APP) – The World Bank has approved a package of assistance worth US$1 billion to support Pakistan’s economic reforms.

The assistance package consists of two Development Policy Credits (DPCs) to support the Government of Pakistan’s efforts to improve the power sector, and reinvigorate growth and investment for reducing poverty and building shared prosperity.

“The Government of Pakistan deserves appreciation for stabilizing the economy, initiating reforms in the power sector as well as revenue mobilization and drawing in the private sector for spurring growth”, said Philippe H. Le Houerou, Vice President of World Bank Group’s South Asia Region.

“Staying on the structural reform path is important for competitiveness of the economy, which in turn is essential for creating jobs and lifting millions out of poverty in Pakistan.” he added.

The Power Sector Reform DPC of US$600 million (with additional co-financing support of the Asian Development Bank and Japan) supports Pakistan’s goal of developing an efficient and consumer-oriented electric power system that meets the needs of its people and economy, sustainable and affordably.

The Power DPC focuses particularly on policy and institutional actions that will improve financial viability and thus reduce the burden of public financing for the sector.

The Power DPC is structured around three objectives: targeting power subsidies to the poorest and improving tariff policy; improving sector performance and opening the market to private participation; and ensuring accountability and transparency.

The Fiscally Sustainable and Inclusive Growth DPC of US$400 million, supports Pakistan’s goal of accelerating growth to help create jobs and economic opportunity for all.

The main development objectives of the credit are to increase private and financial sector development, improve the business environment, facilitate trade and promote financial inclusion, enhance revenue to create fiscal space for expanding social protection for the poor.

The two credits are financed from the International Development Association (IDA), and will be on standard IDA terms, with a maturity of 25 years, including a grace period of 5 years.

The World Bank Group’s Board of Executive Directors also discussed the Group’s – including International Finance Corporation and Multilateral Investment Guarantee Agency – new Country Partnership Strategy (CPS) for Pakistan envisaging a notional financing envelop of $11 billion over the next five years (Fiscal Years 2015-19) for development in both public and private sectors.