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WB okays $800mn for green energy & inclusive economic growth programs

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ISLAMABAD: The World Bank (WB) has approved $800 million financing for Programme for Affordable and Clean Energy (PACE) and the Second Securing Human Investments to Foster Transformation (SHIFT-II) programme.
World Bank Country Director for Pakistan, Najy Benhassine said that the reforms underpinning PACE and SHIFT can contribute to facilitating sustainable investments and generate welfare gains for those most in need, according to a statement issued on Tuesday.
The $400 million PACE focuses on measures to improve the financial viability of the power sector and support the country’s transition to low-carbon energy.
PACE prioritises actions needed to initiate critical power sector reforms focused on: reducing power generation costs; better targeting of subsidies and tariffs for consumers; and improving efficiencies in electricity distribution with the participation of the private sector. Additional medium-term reforms are under development, focusing on subsidies, competitiveness, and power sector sustainability. The goal is to reduce circular debt over the long-term.
World Bank Task Team Leader for the PACE programme Rikard Liden said that power sector reforms are critical to resolving Pakistan’s fiscal challenges. He said decarbonising the energy mix will reduce the dependence on fossil fuel imports and vulnerability to price fluctuations because of movement in exchange rates.
PACE prioritises action on such reforms, which must be sustained to address circular debt and set the power sector on a sustainable path, he added.
The $400 million Second Securing Human Investments to Foster Transformation programme (SHIFT-II) supports a federal structure to strengthen basic service delivery for human capital accumulation. The programme will help improve health and education services, increase income-generation opportunities for the poor, and promote inclusive economic growth.
Tazeen Fasih, World Bank Task Team Leader for the SHIFT-II programme, said that strengthening services that build human capital in a coordinated manner between provincial and federal authorities, along with improved targeting of social safety nets, will better support families to recover from the Covid-19 crisis, and pave the way for more robust crisis preparedness in the future.
The SHIFT-II reforms increase budget reliability for sustainable financing of child immunisation and quality primary healthcare programmes, promote student attendance – especially for children who are out of school due to Covid-related closures – and support data-driven decision-making.
The programme supports reforms to encourage women’s participation in the economy by improving working conditions and empowering those in the informal sector. It supports the enhancement of national safety nets programmes and better targeting to protect the most vulnerable, building resilience to shocks like the Covid-19 pandemic. – TLTP