ISLAMABAD – Pakistan will not get a $100 million loan from World Bank approved for a natural gas efficiency project due to no progress in achieving the development objectives and lack of interest on the part of a gas distribution company.
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A World Bank report said Thursday the failure of the natural gas efficiency project and led to its closure and, as a result, the levels of unaccounted-for gas (UFG) remained high while continuing to drain the precious natural resource.
The project, which was to be carried out by Sui Southern Gas Company (SSGC) in its distribution areas in Karachi, interior Sindh and Balochistan, was aimed at enhancing the supply of natural gas by reducing physical and commercial losses of gas in the pipeline system.
Illegal connections, one of the drivers of UFG, were increasing at a rate faster than the countervailing reduction of technical losses, the Dawn reported.
Justifying its rating of “unsatisfactory”, the World Bank report said it should have exercised caution and not proceeded with a project that did not receive sustained interest from the board and management of SSGC, which had insufficient ownership in the project.
Against the original commitment of $200m, the World Bank had disbursed only $0.25m.
The bank undertook a strategic review of the project, which identified strong implementation challenges with no progress towards achieving the development objectives of the project as well as no disbursement against project-related activities.