ISLAMABAD: Recent media reports alleged the cancellation of a $500-600 million loan for Pakistan under the World Bank’s Program for Affordable and Clean Energy (PACE-II).
However, the Ministry of Economic Affairs has refuted these claims.
The ministry clarified that PACE-II was never under preparation and, therefore, could not have been cancelled.
PACE-II was not included in budget estimates for fiscal years 2022, 2023, or 2024. The report’s assertions have no basis and do not impact Pakistan’s external financing plans.
Pakistan’s financial partnership with the World Bank has shifted its strategic focus from Development Policy Financing (DPF) to Investment Project Financing (IPF).
“PACE-II was not part of budget estimates for FY 2022-24. Therefore, its alleged cancellation has no impact on Pakistan’s external financing requirements or fiscal plans.”
As per the documents available with Azaad English, the focus of the World Bank’s support for Pakistan’s energy sector has shifted to investments in renewable energy, including $1 billion in additional financing for the Dasu Hydropower Project.
Contrary to claims in the report, Pakistan’s partnership with the World Bank remains robust. Since 2009, the World Bank has provided over $5 billion in development policy financing across 12 programs, targeting key sectors such as revenue, energy, social safety nets, and human development. Recent successes include:
SHIFT-I & II: $900 million to strengthen health, education, and civil registration systems.
RISE-I & II: $850 million to improve fiscal management and competitiveness.
PACE-I: $400 million to support energy reforms, including reducing circular debt flow and improving distribution efficiency.
There have been disbursements of over $2 billion in consecutive fiscal years.
