ISLAMABAD: The World Bank has reportedly expressed willingness to fully finance the $150 million cost of the Energy Efficiency and Conservation (EE&C) project, which aims at saving hundreds of billions of rupees annually by taking various energy-saving measures.
Pakistan will pay a two percent interest on the $135 million loan, and an additional $15 million is expected to be provided in the form of a grant for technical assistance. The loan is being taken by the Ministry of Science and Technology for an energy efficiency and conservation project.
According to a study conducted by the World Bank for the project, a 25 percent reduction in building energy use across all sectors could translate into energy savings of 16 gigawatt-hours, providing cost savings of about Rs291 billion per year.
Funding for energy efficiency project: EAD asked to get firm World Bank commitment
The project was formally cleared by the Central Development Working Party for negotiations with the World Bank for a $150 million loan, including a $15m technical grant for capacity-building of the National Energy Efficiency and Conservation Authority.
The CDWP had directed the Economic Affairs Division (EAD) to get a firm commitment of $150 million in funding from the bank for the energy efficiency and conservation project to be executed by the National Energy Efficiency Conservation Authority (NEECA). However, now the bank has reportedly expressed willingness to finance the project.
The project’s sponsors — the Ministry of Science and Technology and the Energy Efficiency Authority — have reported to the Planning Commission that Pakistan’s current energy-saving potential was around 10m to 12m tonnes of oil equivalent — a unit of energy defined as the amount of energy released by burning one tonne of crude oil.
The country’s current primary energy supply stands at about 95m tonnes of oil equivalent and is projected to go beyond 115m in 2025 at an annual growth rate of 5.8pc, as its per capita energy consumption is expected to increase from 405 kilograms of oil equivalent to 469kg during the period.
The efficiency gains by shifting gas consumption to electricity could go significantly beyond Rs250 billion per year — another component of the multi-purpose project.
Most buildings in Pakistan were not constructed with high energy-efficiency standards, resulting in significant unnecessary energy consumption and costs for consumers.
Copyright Business Recorder, 2023