The World Bank’s Board of Executive Directors has approved a grand sum of $800 million in lending for power sector and human development programs in Pakistan.
As reported by Business Recorder, the funds will be used to finance the Pakistan Program for Affordable and Clean Energy (PACE) and the Second Securing Human Investments to Foster Transformation, read a statement.
The $400 million for PACE focuses on measures to improve financial viability of the power sector and support the country’s transition to low-carbon energy. The goal of the program is to reduce circular debt over the long-term.
“Power sector reforms are critical to resolving Pakistan’s fiscal challenges,” said Rikard Liden, World Bank Task Team Leader for the PACE program. “Decarbonizing the energy mix will reduce the dependence on fossil fuel imports and vulnerability to price fluctuations because of movement in exchange rates. PACE prioritizes action on such reforms, which must be sustained to address circular debt and set the power sector on a sustainable path.”
On the other hand, $400 million will be utilized for the Second Securing Human Investments to Foster Transformation program (SHIFT II), which focuses on improving health and education services, increase income-generation opportunities for the poor, and promote inclusive economic growth.
“Strengthening services that build human capital in a coordinated manner between provincial and federal authorities, along with improved targeting of social safety nets, will better support families to recover from the Covid-19 crisis, and pave way for more robust crisis preparedness in the future,” said Tazeen Fasih, World Bank Task Team Leader for the SHIFT II program.
WB said that SHIFT II reforms increase budget reliability for sustainable financing of child immunization and quality primary healthcare programs, promote student attendance, and support data-driven decision-making.
“The reforms underpinning PACE and SHIFT can contribute to facilitating sustainable investments and generate welfare gains for those most in need,” said Najy Benhassine, World Bank Country Director for Pakistan.