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ADB Plans $404 Million to Support Tajikistan’s Development from 2020–2022

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The Asian Development Bank’s (ADB) updated indicative financial assistance for Tajikistan from 2020–2022 is planned at $404 million that will help address the country’s challenges and emerging needs. The final amount will depend on the availability of ADB funds and project readiness, along with possible partnerships and cofinancing from other multilateral and bilateral institutions.

“Our 3-year plan is consistent with the current ADB country partnership strategy with Tajikistan and the national development priorities,” said ADB Country Director for Tajikistan Mr. Pradeep Srivastava. “In addition to the public sector projects, ADB will also explore private sector investments in agribusiness, finance, and other sectors.”

The plan includes projects to enhance labor skills, further develop the energy sector including supporting sector reforms and improving infrastructure, promote financial sector development, as well as improve water resource management. ADB also plans to support projects focused on tourism development, the rehabilitation of key road corridors, urban infrastructure development, increased disaster resilience, and investment climate reforms.

ADB’s first assistance to Tajikistan was in 1998 to support post-conflict reconstruction. Since then, ADB has mobilized over $1.8 billion for the country, including more than $1.1 billion in grants. The assistance has helped improve the country’s transport and energy infrastructure, support social development, expand agricultural production, and strengthen regional cooperation and trade.

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ADB Approves $300 Million to Reform Pakistan’s Energy Sector

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The Asian Development Bank (ADB) today approved a $300 million policy-based loan that will help the Government of Pakistan to address financial sustainability, governance, and energy infrastructure policy constraints in Pakistan’s energy sector.

The financing will support the first of three subprograms totaling $1 billion under the Energy Sector Reforms and Financial Sustainability Program, a key component of a comprehensive multidonor economic reform program led by the International Monetary Fund that aims to put Pakistan’s economy on the path to sustainable and inclusive growth after a deterioration in its fiscal and financial position in recent years.

“The cash shortfall across the power supply chain in Pakistan, also known as circular debt, has shot up to more than $10 billion and is a longstanding chronic issue ailing the country’s power sector,” said ADB Director General for Central and West Asia Mr. Werner Liepach. “A comprehensive and realistic Circular Debt Reduction Plan, assisted by ADB in close coordination with other development partners, is the cornerstone of this subprogram. The plan aims to drastically cut the new flows of circular debt and provides policy directions on addressing accumulated circular debt.”

While Pakistan has made significant effort in recent years to expand its electricity generation capacity and stabilize supply, the country is yet to overcome the challenge of inefficiencies, distortions, and uneven reform progress in the sector. These inefficiencies were estimated to have cost the country’s economy up to $18 billion, or 6.5% of gross domestic product, in 2015.

The energy reform program aims to address the underlying causes of circular debt with a focus on improving inadequate tariff and subsidy systems, strengthening energy accounting, and reducing generation costs.

ADB will finance the program with support from its development partners. The Export–Import Bank of Korea has confirmed it will provide $80 million in cofinancing for the first subprogram.

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Afghanistan will Need Continued International Support after Political Settlement

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Afghanistan will need continued financial support from the international community following a potential political settlement, says a new World Bank report that examines the country’s overall medium-term financing needs under a range of political and economic scenarios.

The World Bank concludes that Afghanistan will require $6 billion to $8 billion a year in international grants between 2020 and 2024 to fund basic services, support faster economic growth, and consolidate and sustain any potential reduction in violence following a political settlement with the Taliban.

An improving security situation, political stability, and freedom of movement can help increase private sector investment and job creation. But the gap between revenue and public expenditure remains large, and certain expenditure needs may increase following a political settlement,” said Henry Kerali, World Bank Country Director for Afghanistan. “While a gradual decline in grant support can and should occur, it needs to be carefully calibrated to economic realities, to avoid deterioration in services and development outcomes. Such a deterioration may, itself, imperil prospects for sustainable peace

While Afghanistan has achieved remarkable progress in increasing revenues over recent years, the gap between revenues and expenditures remains wide. Afghanistan continues to rely on grants to finance 75 percent of its total public expenditures. Total revenues currently amount to around $2.5 billion per year, while expenditures reach around $11 billion per year. 

Due to the current extent of dependence on aid, a sharp reduction in either security or civilian grants would mean insufficient resources to meet pressing expenditure needs, including: security spending, delivery of basic government functions such as social services and infrastructure,  public investments for faster economic growth and poverty reduction, and short-term job creation and community development programs following a political settlement, which will be vital to sustain and consolidate peace.

The report also finds that expectations of a major aid-driven economic dividend following any political settlement are unlikely to be realized. Grant inflows are likely to remain limited under any scenario, relative to the extent of grant support already being provided. The most critical gains for Afghans following any political settlement would rather come from increased private sector investment, job creation, and access to services.

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Renewable Energy Ambition in NDCs Must Double by 2030

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Countries are being urged to significantly raise renewable energy ambition and adopt targets to transform the global energy system in the next round of Nationally Determined Contributions (NDCs), according to a new report by the International Renewable Energy Agency (IRENA) that will be released at the UN Climate Change Conference (COP25) in Madrid. The report will show that renewable energy ambition within NDCs would have to more than double by 2030 to put the world in line with the Paris Agreement goals, cost-effectively reaching 7.7 terawatts (TW) of globally installed capacity by then. Today’s renewable energy pledges under the NDCs are falling short of this, targeting only 3.2 TW.

The report NDCs in 2020: Advancing Renewables in the Power Sector and Beyond will be released at IRENA’s official side event on enhancing NDCs and raising ambition on 11 December 2019. It will state that with over 2.3 TW installed renewable capacity today, almost half of the additional renewable energy capacity foreseen by current NDCs has already been installed. The analysis will also highlight that delivering on increased renewable energy ambition can be achieved in a cost-effective way and with considerable socio-economic benefits across the world.

“Increasing renewable energy targets is absolutely necessary,” said IRENA’s Director-General Francesco La Camera. “Much more is possible. There is a decisive opportunity for policy makers to step up climate action by raising ambition on renewables, which are the only immediate solution to meet rising energy demand whilst decarbonising the economy and building resilience”.

“IRENA’s analysis shows that a pathway to a decarbonised economy is technologically possible and socially and economically beneficial,” continued Mr. La Camera. “Renewables are good for growth, good for job creation and deliver significant welfare benefits. With renewables, we can also expand energy access and help eradicate energy poverty in line with the UN Sustainable Development Agenda 2030. IRENA will promote knowledge exchange, strengthen partnerships and work with all stakeholders to catalyse action on the ground. We are engaging with countries and regions worldwide to facilitate renewable energy projects and raise their ambitions”.

NDCs must become a driving force for an accelerated global energy transformation. The current pledges reflect neither the past decade’s rapid growth nor the ongoing market trends for renewables. Through a higher renewable energy ambition, NDCs could serve to advance multiple climate and development objectives.

The report will be available at https://www.irena.org/publications

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