Pakistan and France have signed the €100 million Credit Facility Agreement (CFA) for the Sustainable Energy Sector Reform Program of Pakistan here to mitigate the electricity outages and to meet the rising power demand.
According to sources, Secretary of Economic Affairs Division (EAD), Tariq Mahmood Pasha, Charg d’Affaire a.i., Embassy of France, Ren Consolo and Country Director of the French Agency for Development (AFD), Jacky Amprou signed the deed which is equal to Rs 11.5 billion.
The Asian Development Bank has approved $300 million in cofinancing of the program.
Power shortages are a major obstacle for Pakistan’s economy. With demand for electricity outpacing supply, inefficient and inadequate transmission and distribution systems have the potential to stifle growth and threaten social strife.
Under this program, Pakistan has embarked on a substantial reform initiative that aims to address financial sustainability issues in the energy sector. This includes recently passed legislation that will improve governance through more clearly defined roles for both the government and the energy sector regulator, reducing debt levels in the energy sector, and increasing investment.
The program also supports government efforts to improve market access for the private sector. Increased energy efficiency, and the implementation of accountability and transparency measures are further actions that will support an increase in investment in the country’s power subsector.
Pakistan’s ambitious energy reform program demonstrates the government’s commitment to improve the reliability, sustainability, and affordability of the energy sector.
Maintaining the momentum for reform will help ensure that all Pakistanis have access to electricity, while keeping the economy on a high-growth path.
For the last ten years, France through the French Agency for Development has provided €610 million to support the Government’s strategy to solve the energy crisis and to fight climate change through investments in low-carbon-emission energy generation in line with COP21 Paris agreement approved by the Parliament of Pakistan.