World Bank urges Pakistan to expedite $55mn power efficiency project
In a letter addressed to Secretary Economic Affairs Dr. Kazim Niaz, the World Bank's new Country Director for Pakistan, Bolormaa Amgaabazar, noted a significant uptick in disbursements and commitments as of June 30, 2025—with disbursements rising to $18.09 million (9.3%) from 3.6% in November 2024, and commitments to $18.28 million (20.7%) from 9.0%.
Still, the Bank flagged that targets for the quarter were not fully met due to rebidding of key contracts, procurement strategy revisions, and delays in grievance resolution.
Wolrd Bank approves $55m in additional financing to Discos
Despite these hurdles, the Bank remains optimistic. 'The project is now on track to meet its development goals by closure,' the letter stated, projecting end-FY26 disbursement and commitment levels at 30% and 95%, respectively.
The World Bank lauded the Economic Affairs Division and Power Division for securing the AF package but emphasized that further momentum depends on meeting several immediate conditions—including finalizing the Financing Agreement and triggering its effectiveness within the 90-day window post-signature.
The three Discos—Hyderabad Electric Supply Company (HESCO), Multan Electric Power Company (MEPCO), and Peshawar Electric Supply Company (PESCO)—have been told to promptly roll out activities under the new funding. During the Bank's May 2025 Appraisal Mission, all stakeholders agreed on a roadmap to eliminate project bottlenecks and enhance implementation speed.
The World Bank stressed the importance of updating the Project Enhancement Action Plan (PEAP) by July 21, 2025, to reflect on-the-ground realities and lessons learned. Similarly, the Project Procurement Strategy for Development (PPSD) must be revised in line with the Bank's 2025 Procurement Regulations to address persistent contract delays.
Key improvements must also be made in procurement quality, bid evaluation speed, complaint management, and oversight of contract execution. All high-value contracts must incorporate rated criteria and early market engagement to ensure transparency and efficiency. Revised procurement plans and bid documents are due to the Bank by July 31, 2025.
On the Environmental and Social (E&S) front, the Bank flagged slow progress in preparing key documents like Environmental and Social Impact Assessments (ESIAs) and Resettlement Action Plans (RAPs). These are to be submitted by the end of July. The Bank warned that continued inaction could stall broader project progress.
While the capacity of Project Implementation Units (PIUs) has improved—with support from the Project Implementation and Management Support Consultant (PIMSC)—gaps remain. The Bank highlighted the need for greater stability in project teams, urging against frequent changes in PIMSC personnel. DISCOs have been instructed to submit a detailed FY26 work plan for consultant engagement by July 31 and to fill all key PIU vacancies with qualified personnel by August 31.
'With focused effort and leadership, the project can still meet its targets and deliver long-term impact on Pakistan's power distribution performance,' the Country Director noted, reiterating the Bank's commitment to the country's reform agenda.
Copyright Business Recorder, 2025
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Business Recorder
2 days ago
- Business Recorder
Pakistan's documented Steel Industryis proud of making Pakistan self-reliantin production of world class steel
Evenin most difficult of situations there is no choicebut to remain hopeful and optimistic in pursuitof good times. This is how challenges could bedefeated and difficulties could be overcome. To achieve success, it is equally important to learn from pastmistakes and not to repeat the same mistakes again and again. Itis very simple, doable as well as an achievable goal for our countrywhich is blessed with abundance of natural resources, unmatchedhuman talent and hard working youth force. Whereas we can identify many weak areas like governancerelated issues, inconsistent policies or failure in implementation ofeven when policies were good. However, there is a broad consensusof all of us on one point – Pakistan is one of the most resilientcountries. In our entire history, we have been making mistakesrepeatedly and doing a lot of experiments, still, this countrycontinues its journey. In some areas we have made remarkable progress like in ourdefence capabilities. In our recent encounter with our arch enemyIndia, Pakistan proved its strength as one of the strongest forces inthe world. After a long time, it was a moment of great pride for eachand every Pakistani when several times bigger adversary was defeatedby the shaheens of our Air Force as well as our armed forces. However, on the economic front, no doubt we are makingsome progress and moving ahead but we are too slow-moving ininches whereas there is need to leapfrog in miles to catchup withrest of the world. Many countries who started their modest economicand industrial journey just like Pakistan decades ago, have overtaken us in economic and industrial progress. We have beenlistening a lot about the fact that South Korea took Pakistan' development plan in early 60s. Today, South Korea is one of theleading industrial countries in the world. Now let's talk about Vietnam and Bangladesh. Even thesecountries are leaving us much behind. This situation merits serioussoul-searching by all of us and especially those at the helm of we went wrong and what needs to be done. These are thequestions which we need to respond and address seriously, if weare willing to change for the better. Now let me focus on the state of affairs of long steel sector: Pakistan's Steel Industry deploys state of theart technology with lowest carbon emissions During the last decade, immense investments were made byleading players of steel sector for enhancement of capacity ofdomestic steel industry. Pakistan China Economic Corridor wasthe biggest charm for the large investors. As a result, manyleading players of Pakistan are far ahead in comparison withregional players in terms of deployment of latest technologiesand in efficiency. Due to investments made in acquiring world-class technologies in recent years by large steel producersof documented sector, Pakistan's steel industry has the lowestemissions. According to recent World Bank report, emissionsintensity of steel production in Pakistan t-CO2/t-steel is farlesser than global benchmark of 2.5 t-CO2/t-steel. Core challenges confronting documentedsteel industry At this point in time, Pakistan steel industry has the capacityto meet the entire domestic demand of steel now as well as infuture. However, right now the industry is working at lessthen 50% of its capacity. During the FY 2021, the import ofscrap to Pakistan was around 5 mln MT which is reduced toalmost 50 % in recent years. This is a direct result of demanddestruction which is the mother of the crisis being faced bythe steel industry. The Govt has taken some good measuresin recent budget, however, much more needs to be done tostimulate housing & construction industry, which will helpnot only the steel industry but it will give new life to over 5 downstream industries. Indeed, this single initiative on thepart of the Govt can help in reviving the entire economy ofthe country. The second biggest challenge facing steel industry ispitching of tax evading informal sector which producessub-standard steel versus those documented & fully compliantplayer who are making payment of all kinds of duties &taxes ethically and produce high quality steel. This situationhas created an unfair competition and has put tax – payingdocumented sector at great disadvantage. So far the Governmenthas not succeeded in taking measures to correct thissituation effectively. As a result, the documented and compliantsteel sector continues to shrink while the informal sectorcontinues to grow. Also, the Government is not givingincentives to fully documented & compliant sector whichindirectly amounts to encouraging the informal economy. Steel is the backbone of any country's economy 'Steel is accorded highest importance world over as it is oneof the basic industries, and it remains one of the most protectedindustries the world over. However, in Pakistan, it remainsas an ignored industry.' These are the remarks of a Chineseinvestor whose company is the first private sector investmentventure from China to Pakistan. Apart from many other factors, the key reason thatdespite its importance for economy the steel industry remainsignored is that in Pakistan there are two types of industrialgroups. Group one comprise of the so-called 'privileged,powerful and successful' industries who get lion's share ofthe Govt subsidies and privileges. Due to power and cloutthis group, it is said, their issues get resolved on a singletelephone call. The Second group comprise of all-of-the-restwho keep struggling for survival but fail to get any supportor importance from the Government machinery. This is thestark reality of Pakistan. If we want our industry to progressthis practice must change so that each and every sector ofeconomy gets equal importance and opportunity to runindustry and to succeed on merit. Substandard steel production and operationsof unregistered mills MUST END! Mostly produced by unregistered mills / informal sector, over50% construction steel sold in our country is substandard and does not conform to Pakistan Standards. This raisesserious questions on the effectiveness of bodies like is in the category of mandatory list and cannot beproduced by unregistered mills. Pakistan falls underearthquake-prone seismic zone and usage of sub standardsteel at such a large scale amounts to creating national riskfor to future generations. Copyright Business Recorder, 2025
Business Recorder
2 days ago
- Business Recorder
Planning minister apprises World Bank official about India's ‘water weaponisation' designs
ISLAMABAD: Minister for Planning, Development and Special Initiatives Ahsan Iqbal called on the international community to ensure India adheres to the Indus Waters Treaty (IWT). He warned that water weaponisation and violations of the treaty could trigger global food and water crises, posing serious risks to regional stability, adding that such actions can imperil the world peace. The minister shared these views in a meeting with Vice President of the World Bank for the Middle East and North Africa Osman Dione, who called on him in Planning Ministry, Islamabad, on Friday. In the meeting, matters regarding strengthening the collaborative partnership between the World Bank and the Ministry of Planning came under discussion. The minister asserted that adopting an export-led growth model is indispensable for sustainable development. He reaffirmed Pakistan's ambition to increase exports from $32 billion to $100 billion, aiming to boost economic growth and sustainability. During the meeting, the World Bank vice president lauded Professor Ahsan Iqbal's significant contributions towards improving Pakistan's economy. He also highlighted the government's successful efforts in curbing inflation through tough policy measures, which have restored investor confidence and driven the Pakistan Stock Exchange beyond the 130,000-point mark. Professor Iqbal stressed the importance of revitalising the previously established partnership between the ministry and the World Bank to accelerate progress in national development projects. The minister noted that the global economy is transitioning from an industrial-based to a technology-driven model, underscoring the need for Pakistan to adapt accordingly. The minister further underscored the government's commitment to addressing child stunting issue, describing it as a serious national challenge requiring urgent and effective intervention. He added that education remains a priority, with rising enrollment rate of girls in higher education signalling positive progress. Professor Iqbal stressed the pivotal role of women in achieving development goals, affirming the ministry's commitment to fostering women's active participation in all socio-economic initiatives. Copyright Business Recorder, 2025
Business Recorder
2 days ago
- Business Recorder
World Bank MENAAP official meets Wapda chief
LAHORE: World Bank Practice Manager for Middle East, North Africa, Afghanistan and Pakistan (MENAAP) Husam Mohamed Beides, accompanied by Senior Energy Specialist Gunjan Gautam, Friday called on Chairman Wapda Naveed Asghar Chaudhry and discussed with him the matters relating to World Bank-funded Tarbela 5th Extension and Dasu Hydropower Projects. Member Water Syed Ali Akhtar Shah, GM/PD Dasu HPP Amir Shafiq-ur-Rehman and GM/PD Tarbela 5th Extension Umair Mannan also attended the meeting. It is pertinent to mention that World Bank is providing financial support worth US$1517 million and US$390 million for under-construction Stage-I of Dasu and Tarbela 5th Extension respectively. The World Bank's Practice Manager was given a rundown of the physical progress achieved so far, ongoing construction works, and schedule for completion of key activities on both projects. He was also apprised of the financial progress and monetary requirements for completion of Dasu and Tarbela 5th Extension Hydropower Projects. Speaking on the occasion, Chairman Wapda appreciated the World Bank's contribution for harnessing low-cost, clean and green energy in Pakistan through Wapda projects. He said that Wapda takes pride in being the partner in progress with the World Bank, as the biggest development portfolio of the World Bank in Pakistan relates to Wapda projects. The Chairman expressed the hope that the World Bank-Wapda partnership will further extend in the days to come. Thanking Wapda for arranging the briefing about progress of Dasu and Tarbela 5th Extension Hydropower Projects, World Bank's Practice Manager lauded the efforts made by Wapda for improving the ratio of environment-friendly electricity in the National Grid and mitigating adverse impact of climate change. He said that the World Bank and Wapda will continue exploring avenues for mutual cooperation for hydro development in Pakistan. Copyright Business Recorder, 2025
