World Bank cancels $100 million loan to Pakistan
The World Bank has reportedly cancelled a $100 million loan to Pakistan, approved for a natural gas efficiency project, due to a lack of interest on part of the gas distribution company.
According to a report in leading Pakistani daily, Dawn, the project was to be carried out by Sui Southern Gas Company (SSGC) in its distribution areas in Karachi, interior Sindh and Balochistan.
It was aimed at improving the supply of natural gas by reducing physical and commercial losses of gas in the pipeline system.
However, a World Bank report said the failure of the project led to its closure, following which the levels of unaccounted-for gas remained high while continuing to drain the precious natural resource.
The World Bank report, while justifying it’s ‘unsatisfactory’ rating, said it should have exercised caution and not proceeded with a project that did not receive sustained interest from the board and management of SSGC, a company which did not have complete ownership of the project.
While the original commitment of $200 million, the bank had only disbursed $0.25 million till date.
The Oil and Gas Regulatory Authority (OGRA) imposed a penalty on gas companies for unaccounted-for gas beyond the benchmark of 4.5 per cent.
While undertaking a strategic review of the project, the World Bank identified strong implementation challenges with no progress towards achieving the development objectives of the project as well as no disbursement against project-related activities.
With IANS inputs