Power Sector Reform: Development Policy Credit

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This first credit in a programmatic series of two single tranche operations supports Pakistan's goal of developing an efficient and consumer oriented electric power system that meets the needs of its people and economy sustainably and affordably. The operation is aimed at improving financial viability and thus reducing the burden of public financing to support operations and investment in the sector. It is at the core of the country partnership strategy (CPS) for 2010-2014 and of the presented CPS for 2015-2019 and supports the World Bank's twin goals of poverty reduction and shared prosperity. The operations are centered on three areas: (a) reducing subsidies and improving tariff policy; (b) improving sector performance and opening the market to private participation; and (c) ensuring accountability and transparency. The operations will support the key challenge of restoring financial viability to the electric power sector and thus reduce the burden on public sector finances. In addition the operations are expected to support faster economic growth, improve the business environment and attract greater private investment, focus government subsidies on the poor, and help set the sector onto a more environmentally sustainable path.