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In a key move aimed at supporting power sector reform in Pakistan, the World Bank has approved an additional $55 million in financing for the Electricity Distribution Efficiency Improvement Project. The decision was finalized on June 27, 2025, under the delegated authority of the World Bank’s Board of Executive Directors, according to a report by Business Recorder.
Technical Talks Held in Islamabad
Prior to approval, technical negotiations were held on June 18, 2025, at the World Bank’s Islamabad office. Discussions included detailed reviews of all key documents related to the financing arrangement. These included:
- The draft Financing Agreement between the Government of Pakistan and the World Bank
- Project Agreements with Hyderabad Electric Supply Company (HESCO) and Peshawar Electric Supply Company (PESCO)
- The Project Paper
- Disbursement and Financial Information Letter
- The Environmental and Social Commitment Plan (ESCP)
These documents form the legal and operational framework of the financing package and reflect both technical and environmental safeguards.
Project Goals and Strategic Relevance
The additional financing aims to:
- Enhance operational efficiency in selected electricity distribution areas
- Support the broader energy sector reform agenda
- Advance the Country Partnership Framework (CPF) between Pakistan and the World Bank
Improving electricity distribution is seen as a critical priority for Pakistan, where losses in transmission and distribution remain a major challenge for the energy sector.
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Focus on HESCO and PESCO
While HESCO and PESCO have not been formally listed for privatization, they are considered key components of the power distribution reform process. These utility companies serve regions where technical and financial inefficiencies have long affected service delivery and financial sustainability.
The World Bank’s involvement is aimed at capacity building, loss reduction, and improved service quality through targeted investments and technical upgrades.
Transparency and Disclosure
In line with the World Bank’s Access to Information Policy, all relevant project documents will be made publicly available, subject to the Government of Pakistan’s consent. This move is intended to promote transparency, public accountability, and stakeholder engagement in the reform process.
