ISLAMABAD: The World Bank is reportedly not satisfied with progress on prior actions assigned to Government of Pakistan (GoP) about Program on Affordable and Clean Energy (PACE-II), well informed sources in Finance Ministry told Business Recorder.
The Bank has conveyed its reservations during a meeting with Additional Secretary Finance (External Finance) on January 28, 2022.
Last year, the World Bank had approved $ 400 million loan funding for PACE initiative meant to improve financial viability of power sector. The PACE-II program focuses on clean energy in Pakistan.
The sources said World Bank, which is actively engaged with Pakistan government in private sector participation in power Distribution Companies (Discos), is of the view that there is no progress since the Cabinet approval of the roadmap.
“World Bank said that without progress it cannot say the program is on track,” the sources added.
The issue of updated grid code and commercial code to set objectives, principles, rules, procedures, rights and obligations that govern the trading in the new wholesale market also came under discussion. World Bank was informed that Nepra is doing consultations on both codes. However, Ministry of Energy (Power Division) needs to lift moratorium on transition to wholesale market.
According to sources, Finance Ministry and World Bank officials discussed National Electricity Plan (NEP) approved by the Federal Cabinet including responsibilities and timelines to implement the policy. World Bank officials stated that they are finalizing the review of the draft NEP.
The draft new Energy Efficiency Policy including goals for replacing inefficient gas appliance, and initial draft also came under discussion at the meeting.
Finance Ministry official informed the World Bank power sector team that the initial draft is currently being reviewed. CCI’s approval is aimed for April 2022 but World Bank raised some objections on the CCI meeting.
During discussion on Transmission System Expansion Plan (TSEP) meant to increase share of variable renewable energy in the generation mix, Finance Ministry informed World Bank that National Transmission and Despatch Company has promised to submit it to Nepra in April 2022.
World Bank was informed that the targets, i.e., reduction in subsidies for unprotected consumers and doing away with incremental block tariff benefits have been completed. However, survey about rationalization of subsidy for agriculture tube-wells in Punjab and Balochistan is to be conducted for which Power Division has to issue a letter to provincial agriculture departments for cooperation with the enumerators. Finance Ministry maintained that considerable work is yet to be completed on prior actions.
On a prior action regarding publication of progress of Circular Debt Management Plan (CDMP) indicators on quarterly basis, updates on CDMP with actualized values for FY 21 and notification of further adjustments to the base tariff to reflect cost changes in the sector, Finance Ministry acknowledged that the prior condition on publication of CDMP indicators is not being followed. The report for December 2021 is not published due to pending approval of the CCoE.
Ministry of Energy is expected to notify FY 22 adjustments in March 2022 after Nepra finalizes determinations.