AfDB $ 300 Million Loan to Strengthen Pakistan’s Energy Sector


MANILA, PHILIPPINES (December 10, 2021) – The Asian Development Bank (AfDB) today approved a strategic loan of $ 300 million to support financial, technical and governance reforms to strengthen Pakistan’s energy sector and ” improve its financial viability.

The financing is part of the second sub-program of the AfDB’s Energy Sector Reform and Financial Sustainability Program, which aims to improve the governance of Pakistan’s energy sector and reduce and manage the cash deficit accumulated along the chain. power supply, known as circular debt. The first sub-program amounting to $ 300 million was approved in December 2019.

“As Pakistan’s key development partner in the energy sector, the AfDB has helped the government expand access to reliable and affordable electricity and help implement reforms that make the sector more efficient. and sustainable, ”said AfDB Managing Director for Central and West Asia, Yevgeniy Zhukov. . “This program will help facilitate public and private sector investment across the energy sector value chain through key policies and integrated planning, and help expand renewable energy production.”

The disruption due to the coronavirus disease (COVID-19) pandemic has strained the finances and supply chains of Pakistan’s energy sector, slowing the pace of sector reforms initiated by the government in 2019. The losses suffered by state-owned enterprises that impacted energy sector circular debt, as well as pandemic relief measures have put unprecedented pressure on the energy sector’s liquidity and finances.

The reforms under the AfDB program will help make Pakistan’s energy sector more financially viable by addressing inefficient tariffs and subsidies, high production costs, system losses and lack of integrated planning. The program also aims to strengthen energy infrastructure and professionalize the management of energy entities to improve their performance.

“The AfDB continues to work with development partners to advance critical energy sector reforms and implement a roadmap for a competitive electricity market,” said Joonho Hwang, AfDB Director for Central and Western Asia. “Ultimately, these reforms will help improve the quality and reliability of power supply for the benefit of all commercial, domestic, urban and rural consumers.”

Pakistan is a founding member of the AfDB. Since 1966, the AfDB has committed more than $ 36 billion to promote inclusive economic growth and improve the country’s infrastructure, energy and food security, transport networks, and urban and social services.

The AfDB is committed to achieving a prosperous, inclusive, resilient and sustainable Asia and the Pacific, while continuing its efforts to eradicate extreme poverty. Founded in 1966, it is owned by 68 members, including 49 from the region.


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