Pakistan is likely to receive JPY 5 billion loan from the Government of Japan, supporting the energy sector reforms. An agreement was signed between Ambassador of Japan to Pakistan, Hiroshi Inomata and Additional Secretary, Economic Affairs Division, Ms. Yasmin Masood.
The Ambassador during the signing ceremony stated Japan considers that, addressing power crisis is a matter of critical urgency in Pakistan. He said, We are pleased to work with the Government of Pakistan to tackle this problem in cooperation with other development partners. The loan amount comes as a part of a joint programme aiming at supporting the energy sector reforms which is co-financed by the Asian Development Bank (ADB) and the World Bank (WB).
The ADB, the WB and Japan have worked with the Government of Pakistan towards developing a reform programme and established policy targets for management of tariff and subsidy, improve sector performance and open the market to private participation, and improve accountability and transparency in the energy sector.
This loan amount is mainly to support achievement of these targets by the government. Additionally, Japan also intends to offer technical assistance for the GoP to implement some of the reform programmes, utilizing Japanese knowledge.
Loan from Japan comes at a concessional rate of Yen LIBOR minus 10bp and the repayment period is 30 years, including the grace period of 10years.