The World Bank has raised alarms regarding the energy sector in Pakistan, emphasizing the urgent need for reforms to avert a potential crisis.

According to the World Bank, if energy reforms are not implemented promptly, electricity tariffs will have to be increased, posing a significant burden on the poor.

"The poor must be saved from the rising electricity rates," the Bank noted, adding that energy sector losses pose a threat to Pakistan's economy.

The alarming situation in the energy sector is highlighted by the escalating circular debt, which has reached Rs2,635 billion in the power sector and Rs2,866 billion in the gas sector in January 2024. These debts account for 2.4% and 2.7% of the country's GDP, respectively, posing a severe threat to the economy.

The losses of electricity distribution companies increased to 0.5% from 0.2%, according to the report.

Meanwhile, World Bank Country Director Najy Benhassine met with Punjab Chief Minister Maryam Nawaz to discuss ongoing development projects and explore avenues for cooperation. During the meeting, Benhassine congratulated Maryam on her election as the first woman chief minister and expressed good wishes for her tenure.

وزیراعلیٰ پنجاب مریم نواز شریف سے ورلڈ بینک کے کنٹری ڈائریکٹر ناجے بن ہاسن کی ملاقات
وزیراعلی مریم نواز شریف کو ورلڈ بینک کے کنٹری ڈائریکٹر ناجے بن ہاسن نے پہلی خاتون وزیراعلی منتخب ہونے پر مبارکباد دی
ورلڈ بینک کے کنٹری ڈائریکٹر ناجے بن ہاسن کی وزیراعلی مریم نواز شریف کے لئے… pic.twitter.com/XfC3GV1oNz
— PMLN (@pmln_org) April 4, 2024

The two sides discussed matters of mutual interest in the meeting, and also agreed to continue mutual cooperation. The meeting also brought under discussion the public welfare development projects in Punjab underway with the participation of World Bank, and emphasized the need for their early completion.

"I will personally monitor the ongoing projects backed by the support of the World Bank," Maryam Nawaz stated, and also informed the official about the Solid Waste Management Project proposed for the entire province.

The two sides also agreed on mutual cooperation for measures to eliminate smog and improve the Air Quality Index. They also discussed the Punjab Green Development Program, going on in collaboration with the World Bank, and reviewed the progress on the Punjab Cities Program for the provision of basic facilities.

The two sides also decided to cooperate in the field of information technology.

Chief Minister Maryam Nawaz also expressed gratitude to the World Bank country director for the organization's cooperation and support in addressing critical challenges facing Punjab.