Islamabad (Web Desk): The World Bank has approved $800 million in loans to finance Pakistan’s budget deficit.
According to WB’s statement, the board of directors approved financing for Pakistan Programme for Affordable and Clean Energy (PACE) and Securing Human Investments to Foster Transformation (SHIFT-II), totalling $800 million.
The board approved the $400 million PACE loan only after the government accepted at least six prior conditions like ensuring reduction in power generation cost, competitive bidding for all new power generation projects, shift to clean energy, Rs1.95-per-unit increase in electricity tariffs, reduction in circular debt and appointing independent boards of power distribution companies, according to World Bank documents.
PACE loan focused on measures to improve financial viability of the power sector and support the country’s transition to low-carbon energy.
The World Bank also approved $400 million for SHIFT-II which supports a federal structure to strengthen basic service delivery for human capital accumulation.
The programme would help improve health and education services, increase income-generation opportunities for the poor, and promote inclusive economic growth, said the World Bank. The SHIFT-II reforms increase budget reliability for sustainable financing of child immunisation and quality primary healthcare programmes, promote student attendance - especially for children who are out of school due to Covid-related closures - and support data-driven decision-making.
The programme supports reforms to encourage women’s participation in the economy by improving working conditions and empowering those in the informal sector.