ISLAMABAD, Oct 22: The federal government has prepared a power sector development plan with a target to provide electricity to 80 per cent of the country's population by the year 2015.

Informed sources said the plan had been prepared in consultation with the World Bank. The bank would also contribute about $500 million to the power sector over a period of five years for power distribution and rehabilitation of the system.

Under the plan, the government has already issued a policy directive to Wapda, the Private Power and Infrastructure Board (PPIB) and the National Electric Power Regulatory Authority (Nepra) to meet different milestones to achieve the target of 80 per cent electrification.

A new policy and implementation cell will be established at the ministry of water and power before December this year through induction of professionals from the market to act as a driving force or "Energy Tsar" in the World Bank's jargon. A summary for the posts and budget for professional staff of the cell has already been sent to the ministry of finance.

It has also been decided to appoint chief executive officers of all the power distribution, generation and transmission companies from the private sector. A decision has also been made to separate Pakistan Electric Power Company (Pepco - an umbrella organization of 12 corporate companies of Wapda) from Wapda by December 2004 with an independent chief from the private sector to steer the power sector privatization without any influence from Wapda.

The sources said the government would provide concessional loans to power distribution companies (Discos) for electrification of rural and less-developed areas. This arrangement will be a part of the sale agreements of Discos at the time of their privatization.

The assets so built by the concessionary loans would be capitalized by the Discos concerned after their completion. The Disco concerned will repay the loan to the federal government in 15 years after a five-year grace period from the year of approval of the loan.

Nepra will set up mechanisms to ensure that the Discos do not park the losses or inefficiencies from the supply of electric power to other non-rural areas, with non-profitable business of supply of electricity to rural or less-developed areas.

The regulator has been directed to prescribe performance standards for power generation, transmission and distribution companies, not later than December 31, 2004 to ensure that the Discos take all required measures to reduce losses due to system-related inefficiencies and improve services and bill collection.

There will be performance-based efficiency improvement targets for all the power companies and those performing better than the targets would retain the additional benefits, while those failing would be penalized by disallowing additional losses as legitimate components of expenses.

Nepra has also been directed to put in place safety and operational standards and a uniform system of accounts for all the power companies before December 31, 2004.