ISLAMABAD: On Thursday, January 19, 2022, the World Bank dismissed the news regarding postponement of $1.1 billion loans.
“The press reports that refer to a World Bank decision to delay approval of potential Bank operations in Pakistan are unfounded”, said Najy Benhassine, Country Director of the World Bank for Pakistan on his official twitter handle.
The news regarding the disapproval of loans created a frenzy across Twitter and many newspapers on Wednesday. The amount is a two part loan through the second Resilient Institutions for Sustainable Economy (RISE-II) worth $450 million and the second Programme for Affordable Energy (PACE-II) worth $ 600 million.
The RISE programme hopes to achieve “fiscal management, promote transparency and private sector growth, and undertake foundational reforms in the energy sector to transition to low-carbon energy,” and the PACE programme sets to “reduce circular debt flow through reducing power generation costs, decarbonising the energy mix, improving efficiency in distribution, and retargeting electricity subsidies,” according to the WB website.
Both programmes indicate reforms in the energy sectors, and the WB believes that macroeconomic challenges cannot be met unless energy costs are cut. This includes reducing generation costs, creating avenues for solar energy and cutting subsidies in the energy sector.
The government had hoped to receive the approval of at least $450 million by January 2023, which would potentially unlock a further $ 450 million loan by the Asian Infrastructure Investment Bank (AIIB), according to news reports.
