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Japan to provide Rs 5b for energy sector
Yasmin, Hiroshi sign agreement in Islamabad
Online
ISLAMABAD – The Japanese government formally agreed on Wednesday to extend a concessional loan of five billion yen (approximately five billion rupees) to Pakistan for supporting the energy sector reforms in the country.
The agreement was signed between Economic Affairs Division Additional Secretary Yasmin Masood and Japan’s Ambassador Hiroshi Inomata here in Islamabad. “Japan recognises that addressing power crisis is a matter of critical urgency in Pakistan,” Inomata stated at the signing ceremony.
“We are pleased to work with the Government of Pakistan to tackle this problem in cooperation with other development partners,” he said. This loan is provided as a part of a joint programme to support the energy sector reforms which is co-financed by the Asian Development Bank (ADB) and the World Bank (WB).
The Japanese government along with the banks has worked with Pakistan to develop a reform programme and set agreed policy targets to (i) manage tariff and subsidy, (ii) improve sector performance and open the market to private participation, and (iii) improve accountability and transparency in the energy sector.
This loan is provided to facilitate achieving these targets by the government. It is expected that pursuing this programme will not only promote the energy sector reforms but also improve the government’s fiscal situation and stimulate economic activities. Japan also plans to provide technical assistance for the government to implement some of the reform programmes, utilizing Japanese knowledge.
This loan from Japan will be provided at a concessional rate of Yen LIBOR minus 10bp. The repayment period is 30 years, including the grace period of 10 years. Japan has been extending active support to the energy sector of Pakistan over the last three decades. For example, Japan financed thermal power stations in Bin Qasim and Jamshoro, and the Ghazi Barotha Hydropower Project.
Japan has also supported the National Transmission and Dispatch Company to expand its grid systems by building 12 new grid stations, networking 1,487km-long transmission lines and upgrading training facilities. In power distribution, Japan has contributed a lion’s share in electrification of over 6,000 villages.
Japan intends to continue to provide necessary assistance to Pakistan in the energy sector at appropriate junctures, while closely monitoring the progress of the reforms and coordinating with other development partners.
Courtesy www.dailytimes.com.pk