Following is the text of press release issued by Asian Development Bank (ADB)
The Asian Development Bank (ADB) and the Government of Pakistan today signed an agreement under which ADB will provide $400 million loan to help Pakistan carry out reforms to overcome power shortages.
"The program loan will support key reforms in the energy sector to enable Pakistan ensure uninterrupted supply of cheaper and dependable power to millions of industrial and private consumers who are presently adversely affected by long-hours of power outages." said Werner E. Liepach, ADB's Country Director for Pakistan.
"This important energy sector assistance will propels growth, boost businesses, and create jobs that are critical to reduce poverty in the country", said Liepach after signing the agreement with Nargis Sethi, Secretary, Economic Affairs Division, Government of Pakistan, and witnessed by Muhammad Ishaq Dar, Pakistan's Finance Minister and ADB's Governor.
In line with Pakistan's National Power Policy approved in 2013, the sustainable energy sector reform program targets robust policy, capacity development and institutional strengthening action to reduce crippling power shortages that according to estimates are costing the country's about 2 percent of its GDP growth every year.
ADB along with Japan and the World Bank have been working with the government to formulate and implement a five-year plan targeting increased power supply, reduction of losses and boosting the efficiency of the power sector.
The program will support government's plans to rationalize tariffs and eliminate subsidies by 2016, except for low income customers. "The reforms will improve transparency and accountability, which will also go a long way in leveraging stronger private sector led investments in the power sector," Werner Liepach added.
The full program, set to complete by June 2018, spans a total of $1.2 billion investment by ADB, and for the first sub-program, co-financing is expected from Japan with $49 million and the World Bank with $600 million.
ADB is the lead development partner in Pakistan's energy sector supporting a wide range of power sector development activities including energy efficiency, transmission, distribution, cross-border natural gas pipelines, power generation, and renewable energy projects.
ADB, based in Manila, is dedicated to reducing poverty in Asia and the Pacific through inclusive economic growth, environmentally sustainable growth, and regional integration. Established in 1966, it is owned by 67 members - 48 from the region. In 2013, ADB assistance totaled $21.0 billion, including co-financing of $6.6 billion.
For more information, contact:
Asian Development Bank (ADB)
Level 8, North Wing, Serena Office Complex
GPO Box 1863, Islamabad, Pakistan
Tel: +92-51-2600351-69, 2087300
Fax: +92-51-2600365-66, 2087397-98