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Pakistan, WB ink $195m agreements to improve electricity distribution

By Staff Reporter | nation Dec 24, 2021

ISLAMABAD - Pakistan signed financing agreements of Electricity Distribution Efficiency Improvement Project worth $195 million with the World Bank on Thursday in Islamabad.

Mian Asad Hayaud Din, Secretary Economic Affairs Division, signed the loan agreement on behalf of government of Pakistan while representatives of HESCO, MEPCO and PESCO signed the project agreements. Anjum Ahmad, Operations Manager World Bank, signed the agreements on behalf of the World Bank.

The project objectives are to improve operational efficiency in targeted areas of three electricity distribution companies i.e. Hyderabad Electric Supply Company (HESCO), Multan Electric Power Company (MEPCO), Peshawar Electric Supply Company (PESCO) and achieve progress on the power sector reform agenda.

The “Electricity Distribution Efficiency Improvement Project” aims to support investment programs of three DISCOs’ to improve reliability of electricity supply and reduce technical losses through; (a) new grid stations; (b) augmentation and upgradation of existing grid stations; (c) construction, rehabilitation of transmission lines, modernization of DISCOs operations and management functions, revenue and equipment protection program and improving operations and maintenance. The project will also support the Power Division in fulfilling its policy mandate under the National Electricity Policy 2021 and implement power sector reforms.

The interventions under the project specifically aim at improving governance, technical capabilities, safety, and commercial performance of the DISCOs to better serve their customers. The project will also support Ministry of Energy (Power Division) to implement power sector reforms, strengthen its oversight function and support enhancing private participation in the management of the DISCOs. It will also contribute to focus area on growth by improving supply of electricity to businesses, industry and agriculture consumers. It also has significant contributions towards achieving the goals for the focus area Green and Clean Pakistan.

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 project will also invest in climate-resilient infrastructure, particularly grid stations and transmission lines, which are critical to distribution and utility services.

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 Program for Affordable and Clean Energy (PACE), which focuses on improving its financial viability and transitioning to low-carbon energy. The project will increase the reliability of electricity services for residential, agricultural, commercial, and industrial sector consumers in project areas, and will contribute to reducing carbon emissions.

The Secretary, EAD thanked and appreciated the World Bank management for extending continuous support to the present government to promote inclusive and sustainable economic development.

At the occasion, the Secretary, EAD shared that, even at time of prevailing difficult situation, government of Pakistan kept its focus on implementing structural reforms so that the economy regains its strength. He reiterated the government’s commitment to further strengthen implementation of reforms, including comprehensive power sector reforms focusing strongly on reducing current and future power costs, reducing reliance on imported fossil fuel, increasing renewable energy, addressing inefficiencies in distribution and lowering subsidies in the sector by better targeting them to those most in need.

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