ADB to provide $810 mln finance to support Pak's power sector

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Singapore, Sept 5 (UNI) Pakistan's power sector, which is trying to cope up with the growing demand, will get a boost from a 810 million dollar, multi-tranche financing facility from the Asian Development Bank (ADB).

The funds, to be released in several tranches over 10 years, will support Pakistan's Power Distribution Enhancement Investment Program for 2008-2017, which is estimated at 5.2 billion dollars.

The country's national power grid is currently short of generating capacity and is suffering from insufficiently maintained transmission and distribution systems that result in supply interruptions to customers, said the Manila-based ADB.

System losses from distribution companies range from 33 per cent to 10 per cent, above international best practice, it has pointed out.

ADB's funding will support the government's ongoing power sector reform program that is designed to provide a safe, reliable supply of power and to meet an estimated annual eight per cent rise in GDP growth from 2005-2015, and to expand power coverage in rural areas.

''A secure and predictable electricity supply will lead to social and economic benefits and improve conditions for schools, hospitals and other social services,'' said ADB Central and West Asia Regional Department Principal Energy Specialist Rune Stroem.

ADB's investment program will focus on the distribution sector, which is burdened with worn out and overloaded infrastructure, power losses, capacity shortfalls, and other constraints.

It aims to help the distribution companies provide an additional 12,000 gigawatt-hours (GWh) of electricity towards meeting expected peak demand and to give an additional 30 million people access to power from the national grid.

The program will ensure timely subsidy payment by the government to the distribution companies. It also aims to improve financial management and corporate governance standards in distribution companies that should help attract more private firms to invest in the sector.

UNI XC SR BD1525

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