World Bank Approves $1 Billion Loan for Pakistan’s Dasu Hydropower Project
World Bank Loan
The World Bank has approved a significant $1 billion loan to Pakistan. This loan will fund the first phase of the Dasu Hydropower Project, which aims to enhance and expand Pakistan’s electricity supply. Here’s a detailed breakdown of this development:
Purpose of the Loan
– Enhancing Electricity Supply: The $1 billion loan will be used to support the first phase of the Dasu Hydropower Project. The primary goal is to improve and expand the country’s electricity supply.
Details of the Dasu Hydropower Project
– Project Overview: The Dasu Hydropower Project is a major initiative in Pakistan to increase affordable electricity production.
– Electricity Generation:
– Phase One: This phase is expected to generate 2,160 megawatts of power.
– Overall Goal: The entire project aims to boost Pakistan’s power generation capacity from the current 4,320 megawatts to 5,400 megawatts.
Need for the Project
– Cost of Electricity: Pakistan has been struggling with high electricity costs, largely due to reliance on expensive imported fuels for power generation.
– Alternative Energy Use: Due to these high costs, many households, factories, mosques, and hospitals have started using solar power. This shift adds strain to those still dependent on the national grid.
Impact and Expectations
– Affordable Energy: The Dasu Hydropower Project is anticipated to produce more affordable electricity, reducing reliance on imported fuels.
– Socio-Economic Benefits: According to the World Bank, the project will not only improve electricity provision but also expand access to socio-economic facilities, benefiting the broader population.
Related Developments
– Tax Refund System: On a related note, the Federal Board of Revenue (FBR) in Pakistan has demanded $25 million from the World Bank. This funding is intended to enforce an automated tax refund system under the Income Tax Ordinance (ITO) 2001.
– FBR Report: The FBR submitted a report titled ‘Findings and Recommendations of Committee for Effective Enforcement of Section 170A [of the ITO-2001]’ to the Islamabad High Court, highlighting the need for improvements in tax refund enforcement.
Conclusion
The approval of a $1 billion loan by the World Bank marks a significant step for Pakistan’s energy sector. The Dasu Hydropower Project is expected to provide a substantial boost to the country’s electricity generation capacity, making energy more affordable and accessible. Additionally, efforts to improve the tax refund system indicate a broader push toward economic reform in the country.
These initiatives collectively aim to address critical issues in Pakistan’s energy and economic infrastructure, promising long-term benefits for its population.
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