World Bank approves additional $55 million for Pakistan’s power distribution upgrade

ISLAMABAD: The World Bank has approved an additional $55 million in financing for Pakistan’s Electricity Distribution Efficiency Improvement Project, aimed at enhancing the performance of two underperforming power distribution companies. 

According to sources cited by Business Recorder, the International Development Association (IDA), the World Bank’s concessional financing arm, authorised the funding on June 27. The funds will support the Hyderabad Electric Supply Company (HESCO) and Peshawar Electric Supply Company (PESCO), both of which have consistently ranked among the weakest performing distribution firms in the country. 

The new financing will be used to scale up the deployment of Asset Performance Management Systems (APMS), which are designed to improve operational and financial efficiency. Technical discussions between Pakistani officials and the World Bank were held at the Bank’s Islamabad office on June 18. 

Officials say the funding aligns with the project’s broader goals of strengthening operational efficiency, advancing energy sector reforms, and supporting the World Bank’s Country Partnership Framework (CPF) with Pakistan. 

Despite their poor performance, HESCO and PESCO have not been earmarked for privatisation, unlike several other state-run power utilities under the government’s reform programme. 

During negotiations, the two sides discussed a range of project-related documents, including the draft Financing Agreement, implementation arrangements, environmental and social commitments, and disbursement protocols. Legal agreements with HESCO and PESCO were also reviewed. 

In line with its Access to Information Policy, the World Bank plans to publicly release key documents such as the Project Paper and financing agreements, following the necessary approvals. However, certain sensitive data that could affect the Bank’s relationship with the Pakistani government may be withheld, pending further revisions and mutual consent. 

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