The government has sought approval for an approximately $400 million energy sector loan by the World Bank (WB) by end-September in order to cope with a 20 per cent increase in peak summer electricity demand.
In this regard, a visiting WB delegation led by its vice president for South Asia Hartwig Schfer, had a meeting with Minister for Energy Hammad Azhar and Minister for Planning Asad Umar on Wednesday.
According to a report by Dawn, a meeting of WB’s Board of Directors is expected on September 27 and the authorities are making efforts to address outstanding issues including finalisation of the Circular Debt Management Plan (CDMP) in advance to ensure smooth sailing.
An official statement said that the delegation was informed that due to effective measures by the government the growth in circular debt was being curtailed to a considerable amount. During FY21, around Rs130bn was added to the circular debt which was some Rs408bn lower than in FY20, adding that the Power Division has planned an addition of considerable capacity in the existing transmission network by the end of FY22 for which funds have also been allocated.
Meanwhile, the circular debt had been reconciled at about Rs2.33 trillion as of June 30, 2021, about which the Power Division claims that a major part was due to unbudgeted and unpaid subsidies.
