The World Bank has canceled a $500 million loan for Pakistan, citing non-compliance with key conditions, including renegotiation of power purchase agreements under the China-Pakistan Economic Corridor (CPEC).
According to media reports, one major reason for withholding the new budget support loan is that Pakistan has almost exhausted its borrowing quota.
Government sources confirmed that the World Bank canceled a loan worth $500 to $600 million, which was intended to provide Pakistan with affordable and clean energy solutions.
In June 2021, the World Bank approved a $400 million tranche as part of its energy support program for Pakistan. However, further funding was conditioned on meeting several requirements, including renegotiation with Chinese power plants and other Independent Power Producers (IPPs) under CPEC.
Officials stated that no significant progress was made in renegotiating with CPEC power plants, leading to the cancellation of the loan
