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Japan,Pakistan,Philippines,United States : ADB approves $400 million loan to boost PAKISTAN'S energy sector

April 29, 2014

The Asian Development Bank (ADB) approved $400 million loan to help Pakistan carry out reforms for overcoming power shortages.

This is a soft and concessionary loan for Pakistan, which has the best terms and conditions with interest rate of even less than 2% annually.

The ADB also approved a loan of $900 for Jamshoro coal power project to produce cheaper electricity.

This loan would support key reforms in the energy sector to ensure uninterrupted supply of cheaper and dependable power to industrial and private consumers, who were adversely affected by long power outages.

This important energy sector assistance will propel growth, boost businesses, and create jobs that are critical to reduce poverty in the country.

Pakistan's National Power Policy approved in 2013, the sustainable energy sector reform programme targets robust policy, capacity development and institutional strengthening action to reduce crippling power shortages that according to estimates, are costing the country about 2% of its GDP growth every year.

The ADB with Japan and the World Bank have been working to formulate and implement a 5-year plan targeting increased power supply, reduction of losses and boosting the efficiency of the power sector.

The programme supports government's plans to rationalize tariffs and eliminate subsidies by 2016, except for low income customers.

The reforms improve transparency and accountability, which also go a long way in leveraging stronger private sector led investments in the power sector.

The full programme is set to complete by June 2018, spans a total of $1.2 billion investment by the ADB, and for the first sub-programme, co-financing is expected from Japan with $49 million and the World Bank with $600 million.

The 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.

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Source: TendersInfo (India)

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