World Bank cancels $100 million loan for Pakistan

The main aim of the project was to enhance the supply of natural gas by reducing physical and commercial losses of gas in the pipeline system.

Created On: Dec 9, 2016 18:13 IST

The international financial institution, World Bank has cancelled a $100 million loan to Pakistan that was meant to be for a natural gas efficiency project.

The loan was cancelled, as the gas distribution company that was responsible for the project, failed to make any progress in achieving its developmental objectives and showed very less interest in the project overall.

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The company in question is Sui Southern Gas Company (SSGC) and it was supposed to initiate the project in its distribution areas located in Karachi, Balochistan, and interiors of Sindh. The main aim of the project was to increase the supply of natural gas in the designated areas by reducing gas loss in the pipeline system.

However, it failed to complete its procurement process in time due to bureaucratic processes and the management of SSGC stated that delay in the procurement process led to the failure of the project.

According to a report by the World Bank, failure of the project resulted in its closure. With it, the levels of unaccounted-for gas (UFG) increased in the country. UFG mostly arises from broken or leaking pipelines and gas theft, which happens through tampered metres and illegal connections.

So, instead of sanctioning the originally decided amount of $200 million, the World Bank just handed over $0.25 million.Apart from this, the international institution also stated that the company should have been more cautious and the country should not have initiated such a project in the first place when the company-in-charge itself showed such less interest.

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