World Bank Approves Loans Worth $800 Million for Pakistan

World Bank Approves Loans Worth $800 Million for Pakistan

The World Bank’s Board of Executive Directors has approved $800 million in financing for two programs in Pakistan – the Pakistan Program for Affordable and Clean Energy, and the Second Securing Human Investments to Foster Transformation.

The Pakistan Program for Affordable and Clean Energy (PACE) is worth $400 million and focuses on measures to improve the financial viability of the power sector and support Pakistan’s transition to low-carbon energy.


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The PACE prioritizes actions needed to initiate critical power sector reforms focused on the reduction of power generation costs, better targeting of subsidies and tariffs for consumers, and the improvement of efficiencies in electricity distribution with the participation of the private sector.

While additional medium-term reforms focusing on subsidies, competitiveness, and power sector sustainability are under development, the goal is to reduce the circular debt over the long term.

Rikard Liden, the World Bank Task Team Leader for the PACE program, stated that “power sector reforms are critical to resolving Pakistan’s fiscal challenges”.

“De-carbonizing the energy mix will reduce the dependence on fossil fuel imports and vulnerability to price fluctuations because of movement in exchange rates. PACE prioritizes action on such reforms, which must be sustained to address circular debt and set the power sector on a sustainable path,” he explained.

The Second Securing Human Investments to Foster Transformation program (SHIFT II) is worth $400 million and supports a federal structure to strengthen basic service delivery for human capital accumulation. It will help to improve health and education services, increase income-generation opportunities for the poor, and promote inclusive economic growth.

Tazeen Fasih, the World Bank Task Team Leader for the SHIFT II program, said, “Strengthening services that build human capital in a coordinated manner between provincial and federal authorities, along with improved targeting of social safety nets, will better support families to recover from the COVID-19 crisis, and pave the way for more robust crisis preparedness in the future”.

SHIFT II reforms increase budget reliability for the sustainable financing of child immunization and quality primary healthcare programs, promote student attendance — especially for children who are out of school due to COVID-related closures, and support data-driven decision-making.


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The program supports reforms to encourage women’s participation in the economy by improving working conditions and empowering those in the informal sector. It also facilitates the enhancement of national safety net programs and better targeting to protect the most vulnerable while building resilience to shocks like the COVID-19 pandemic.

Najy Benhassine, the World Bank Country Director for Pakistan, said, “The reforms underpinning PACE and SHIFT can contribute to facilitating sustainable investments and generate welfare gains for those most in need”.

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