ISLAMABAD, Feb 4: The World Bank on Tuesday offered finance assistance for hydroelectric power projects, provided they do not have negative environmental impact.

This was stated by World Bank Country Director for Pakistan John Wall while meeting with minister for water and power Aftab Ahmad Khan Sherpao.

He said that substituting imported fuel with domestic fuel would remove sensitivity of consumers towards power tariff.

According to an official announcement, Mr Sherpao told Mr Wall that the government has addressed all the concerns of the World Bank regarding Ghazi Barotha Hydel Power Project, the first unit of which will start functioning on trial basis in May, 2003.

He said foreign exchange reserves of more than $9 billion and reforms in various sectors including Water & Power sector has put Pakistan back on the path of development.

The minister said that Faisalabad Electricity Supply Corporation could not be privatized according to schedule as there were some technical problems regarding transfer of assets in which the investors were more interested. “However, an international tender is now being floated for the privatization of the Corporation”.

The minister informed Mr Wall that major reforms were introduced in the last four years in water & power sector and set new targets of investment of Rs150 billion as envisaged in Wapda’s Vision 2025.

He said that 45 per cent of the rural areas of the country are still deprived of the facility of electricity. The government recently prepared a financial improvement plan for Wapda to reduce commercial losses, generate sufficient resources to cover operational and debt servicing needs.

He said many of the administrative and legal steps had been taken to complete the corporatisation of Wapda’s Power Wing.

According to Vision 2025, the thermal power plants using furnace oil are being converted into gas or coal in order to reduce the cost of power and reduce import bill.

Mr Wall assured that the World Bank is interested in financing the water & power sector reform process as well as financing the infrastructure of the power sector. He said that lessons could be learnt from evaluation of National Drainage Programme that is near completion. Similarly, 43 big irrigation canals would need lining, de-silting and replenishing to further improve irrigation system.