World Bank has offered to conduct diagnostic study for three or four power Distribution Companies (Discos) through a grant, to be followed by investment. The Bank has sent its offer to Minister for Power Omar Ayub, after a detailed meeting with him and his team. Asian Development Bank (ADB) Mission has also held meetings with the authorities for funding in power sector.
Demetrios Papathanasiou, World Bank's Practice Manager, Energy and Extractives Global Practice South Asia Region, in a letter addressed to the Minister acknowledged holding a very useful meeting which led the World Bank team to "learn your insights and resolve to address some of the deep-rooted issues in the sector".
The team also met the Special Secretary Ministry of Energy Power Division, Chairman Energy Task Force, MD NTDC, CEO IESCO, CEO CPPA-G, CEO AEDB and their teams and Special Assistant to the Prime Minister on Energy. "We discussed the need to modernize the transmission and distribution companies and to reduce the cost of generation from new as well as existing sources," he added.
World Bank stated that it is already engaged in the energy sector with a portfolio of about $ 2.7 billion as it is financing three hydropower projects of Wapda namely Dasu and Tarbela 4th and 5th extensions and recently approved operation for NTDC to overcome transmission bottlenecks and to improve their management and planning functions. In addition, the Bank has an ongoing activity to assess the integration of Variable Renewable Energy into the grid (VRE-study) and is supporting Government of Sindh to do reverse auctions for solar along with rooftop solar on government buildings in urban areas and distributed generation and solar home systems in remote areas of Sindh with poor access to electricity.
The Bank has re-confirmed that it is ready to help address some of the issues the sector is facing particularly to improve the performance of the Discos.
"As a first step, the Bank can help do a comprehensive diagnostic study for 3-4 distribution companies through a grant funding, to be followed by an investment operation focusing on institutional strengthening, infrastructure, technology and consumer-end energy efficiency. The scope of the diagnostic study could also include assessment to expand in-country manufacturing, contracting and commercial financing capacities. We will be working with your colleagues to prepare the Terms of Reference for this in the next few weeks," Demetrios added.
The Practice Manager further stated that the Bank is also ready to support more renewable energy in the system so that Pakistan can also benefit from the reduced cost of solar and wind generation observed around the world.
"We could plan to build upon the work we are already doing through the VRE study for Pakistan and expand Solar Project for the whole Pakistan," he continued. World Bank further stated that it can partner with the government on its initiatives both on the cost and revenue side for an efficient power sector and "would need your support for a request through the Economic Affairs Division (EAD) to undertake this work".
World Bank, Lead Energy Specialist, South Asia Energy, Dr Rikard Liden said on Wednesday that World Bank is working on new funding of $ 1.5 billion for the power sector.