Delays risk $55m energy reform project, World Bank warns Pakistan

ISLAMABAD: The World Bank has called on Pakistan’s Power Division and three key power distribution companies to urgently ramp up efforts to implement a $55 million project aimed at improving electricity distribution, warning that further delays could affect the timely and effective use of the funds.

In a letter addressed to Secretary of Economic Affairs Dr Kazim Niaz, the Bank’s new Country Director for Pakistan, Bolormaa Amgaabazar, acknowledged some recent progress in disbursements and commitments under the Additional Financing (AF) for the Electricity Distribution Efficiency Improvement Project (EDEIP). As of June 30, disbursements reached $18.09 million, up from 3.6 per cent in November 2024, while commitments rose to $18.28 million, or 20.7 per cent of total funding.

Despite improvements, the World Bank pointed out that targets for the quarter were missed due to the rebidding of major contracts and changes in procurement strategies as well as delays in resolving complaints.

Even so, the bank remains hopeful that the project will achieve its goals. It expects 30 per cent of funds to be disbursed and 95 per cent committed by the end of the 2025-26 financial year.

While praising the Economic Affairs and Power Divisions for securing the additional financing, the bank underlined the need to maintain momentum. It urged authorities to finalise the financing agreement and ensure its activation within 90 days of signing.

Three power companies, Hyderabad Electric Supply Company (HESCO), Multan Electric Power Company (MEPCO) and Peshawar Electric Supply Company (PESCO), have been directed to move quickly in launching project activities. A roadmap to address delays and speed up progress was agreed upon during the Bank’s appraisal mission in May this year.

The bank also stressed the need to update the Project Enhancement Action Plan (PEAP) by July 21, making it reflect on-ground realities and past lessons. It further called for a revised procurement strategy that aligns with its 2025 regulations, especially to tackle delays in contract awards.

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