FOR IMMEDIATE RELEASE
World Bank
1818 H Street, N.W., Washington, D.C. 20433, U.S.A. *Telephone: (202) 477-1234
BANK NEWS RELEASE NO. 89/101                          Contact: Fawzi Rihane
(202) 473-2675
WORLD BANK SUPPORTS PAKISTAN'S ENERGY SECTOR
WASHINGTON, June 30, 1989 -- Pakistan's ongoing program of policy and
institutional reforms in the energy sector will benefit from a $250 million
World Bank loan, the second such lending operation in support of the country's
adjustment efforts in the sector.
The loan will support a core energy investment program through 1991, as
outlined in the Pakistani government's current Five-Year Plan and will complete
investments launched under the previous plan. Measures will be introduced to
improve resource mobilization for the program by rationalizing energy pricing,
integrating donor cofinancing, attracting private-sector financing, and
coordinating access to the credit and capital markets.
Institutional reforms will improve efficiency in the sector by
decentralizing decisionmaking and moving towards financial and administrative
autonomy for power, gas and oil entities.
The sectoral investment program includes projects to be implemented by the
Water and Power Development Authority, Oil and Gas Development Corporation,
Karachi Electric Supply Corporation, Sui Southern Gas Company Limited, Sui
Northern Gas Pipelines Limited, Pakistan Mineral Development Corporation,
National Energy Conservation Center, the Energy Planning unit of the Ministry of
Planning and Development, the Department of Forestry at the Ministry of
Agriculture, and the Environment and Urban Affairs Division at the Ministry of
Housing and Works.
The energy sector absorbs about one-third of total public investments in
Pakistan. The country's commercially exploitable energy resources consist of
hydropower, natural gas, oil and coal. The country also has a large base of
traditional fuels, in the form of fuelwood and agricultural and animal waste,
which provide a major proportion of rural consumers' energy needs.
The World Bank loan is for 20 years, including five years of grace, with a
variable interest rate, currently 7.65 percent, linked to the cost of the Bank's
borrowings. It also carries an annual commitment charge of 0.75 percent on the
undisbursed balance.
Note: Money figures are in U.S. dollar equivalent.