ISLAMABAD, Nov 17: The World Bank has told Pakistan that it would continue its deep engagement and support for the completion of power sector reforms in the country, a senior government official told Dawn.

“The power sector reforms will continue to be supported through policy dialogue and adjustment lending which by strengthening macroeconomic stability and reducing exposure risk is expected to improve the climate for private investment, particularly for the privatization of distribution companies”, the official quoted a bank letter recently written to the secretary economic affairs division.

The bank started its engagement in Pakistan’s power sector during early 1990s and since then provided over $3.5 billion specifically for this sector. Its power sector energy development fund worth around $1.5bn resulted in attracting over $5bn investment in Pakistan particularly through independent power producers.

In addition, the bank would support through investment lending the privatization of the distribution companies. The International Finance Corporation will aim to mobilize private investment for the power sector, particularly for the privatized distribution companies.

The IFC will also continue to act as advisor to the government on the privatization of Faisalabad Electric Supply Company. FESCO and Jamshoro Power Generation Company, the two electric supply and generation companies respectively of Wapda, are on the top of privatization agenda.

The World Bank assistance has primarily been focused on power sector reforms and corporatization that divided Wapda into 12 distribution, generation and transmission companies. The programme would help create a power sector market like stock exchanges in which the electricity would be traded as a commodity by power producers and big consumers.

Under the three year strategy, IFC will invest equity and loan financing in gas, mining, power and telecom in the infrastructure sectors besides banks and NBFIs in the financial sector.

The MIGA will offer political risk insurance through its guarantee programme in the gas, mining, power and telecom sectors.

The bank says that the strengthening of public institutions like the CBR both improved the accountability and efficiency of the public sector and improved the investment climate for the public sector.

Consistent with the bank’s earlier diagnostic, priority would be given to the elements of trade regime that discourage export orientation and participation in global production sharing, productivity growth and international competitiveness.

At the provincial level, the bank’s dialogue and proposed assistance to Sindh and NWFP, which have sought the WB assistance, will also focus on reforms that fall within the provinces purview like labour and industrial regulations to improve investment climate.

The bank said it would give top priority to natural gas sector but the strategy would be to support implementation of the planned programme of retain and producer price adjustments including bringing feedstock gas prices to the fertilizer industry in line with prices to the rest of the industrial sector and reflecting any fertilizer subsidy in the budget.