PTI Govt Faces High Political and Governance Risks to Reform Power Sector: WB

Government

In order to implement the National Electricity Policy 2021 and the least-cost power generation plan, there must be a complete political consensus among the federal government and provincial governments, the World Bank has said.

According to a World Bank document issued ahead of the approval of a loan worth $400 million for development policy financing of the federal government’s affordable and clean energy program, the overall risk rating to achieve the goal to reduce circular debt by decreasing power generation costs, decarbonizing the energy mix, improving distribution efficiency, and retargeting electricity subsidies, is ‘high.’


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The document describes the governance risk in Pakistan as ‘high’ because the country’s governance system remains influenced by elites who have the ability to derail the process of reforms’ implementation when reforms negatively impact their vested interests.

It also adds that the strong vested interests faced by the federal government in reducing circular debt will test its resolve to implement and sustain.

It has suggested the federal government mitigate political and governance risks by engaging provincial counterparts and major interest groups with an aim to reach consensus on national issues by realigning priorities.


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The World Bank has lauded the National Electricity Policy 2021 of the federal government which aims to bring efficiency, transparency, competition, financial viability, AND environmental sustainability in the country’s power sector.

Under the National Electricity Policy 2021, the government also introduced competitive bidding for the first time for all generation technologies, except for strategic projects such as large hydropower on the Indus cascade.

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