loan to improve clean energy access in KPK, Punjab

ADB agrees $325 million

ISLAMABAD: Pakistan on Tuesday signed in a $325 million worth of loan agreement with the Asian Development Bank (ADB) to improve access of rural households in Khyber Pakhtunkhwa and Punjab to renewable energy.

Minister for Finance, Revenue and Economic Affairs Senator Ishaq Dar witnessed the agreement signing ceremony for the ‘Access to Clean Energy Investment Program’ spanning over five to 10 years.

“The ADB assistance will contribute to Pakistan’s national goal of enhanced energy security,” a statement said. “The program will support the provincial governments of Khyber PakhtunKhwa (KPK) and Punjab to achieve increased access to sustainable and more reliable electricity services for vulnerable communities.” 

The investment program includes expanding access to renewable energy, notably micro-hydropower plants in rural off-grid areas of Khyber Pakhtunkhwa, and decentralised solar plants for education and primary health care facilities in KPK and Punjab. It will also provide women and girls with increased opportunities to obtain energy services and benefits, enhance institutional capacity to foster sustainability and promote public sector energy efficiency in Punjab.

“ADB along with other development partners has contributed significantly for economic development in Pakistan,” finance minister said in the statement.  Senator Dar appreciated ADB’s continued support, especially for energy and infrastructure sectors which, he said, are the top most priority of the government. 

“ADB has all along been our great partner,” he added.  The minister also referred to the fresh Fitch ratings, which reaffirmed Pakistan’s rating at ‘B’ with a ‘stable’ outlook. Citing a Bloomberg report, he said most of Pakistan’s developments are fairly positive. 

“All this bears testimony to the economic achievements of the present government through a concerted reforms agenda,” he added. Werner Liepach, country director ADB said most significant aspect of the project is that it is people centric, “and as many as 2.6 million students will benefit from it, of which 1.2 million are girls.”

Of the $325 million loan, $237.3 will be utilised for projects in Khyber Pakhtunkhwa, while the remaining $87.6 million will be used for projects in Punjab. The KPK’s component of the project will entail installation of around 1,000 micro-hydropower plants in off-grid locations, and installation of solar facilities in around 8,187 schools and public health facilities. 

In Punjab, solar facilities will be installed in around 17,400 schools and public health facilities, with at least 30 percent of the said schools being girls-only. The program will be implemented over a period of five years (2017-2021). It includes provision of training to women to equip them to use the benefits resulting from the availability of electricity in each province.

The project would also strength the procurement, monitoring and internal audit capacities of provincial governments, including the establishment of an information and communications technology-driven performance monitoring system.