Pakistan to Pay $2.2 Million to ADB as Commitment Charges

Pakistan will have to pay $2.2 million this year as commitment charges on a $400 million loan from the Asian Development Bank (ADB) extended to Pakistan in 2015, a national daily reported.

The loan was provided for the installation of Advanced Metering Infrastructure (AMI) in LESCO and IESCO to reduce electricity theft and improve recovery through accurate billing, the news report added.

However, the project was never installed in DISCOs, and the government paid $1 million by 2018 as commitment charges, which has now swelled up to $2.2 million.

The sitting government is planning to either cancel the project under ADB loan or initiate the project by increasing its scope, but no progress has been made on the project since 2018.

The top functionaries want to execute the project through Chinese Company — State Grid Corporation of China (SGCC) under the umbrella of CPEC, the newspaper report added.

Tabish Gauhar, Special Assistant to PM on Power and Petroleum, speaking to media, said that the country has been paying commitment charges for many years as the $400 loan has not been utilized. He said that the project was faulty by design.

“Under the earlier scope of the project, AMI was to be installed at LESCO and IESCO, where transmission and distribution losses were the lowest, which are still in the range of 8 percent as both the DISCOs have been efficient companies,” he said. Adding, “The AMI should have been installed in the loss-making companies such as HESCO, SEPCO, PESCO, and MEPCO.”

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