ISLAMABAD: France on Thursday signed an agreement with Pakistan to provide the country with a loan of 165 million Euro to help it enhance power transmission network and rehabilitate a hydropower project.

Secretary finance Shahid Mehmood, Ambassador of France Martine Dorance and country director of the French Agency for Development (AFD) Jacky Amprou signed the soft loan agreement at the ministry of finance.

Finance minister Ishaq Dar witnessed the loan signing agreement. The loan agreement is aimed at financing energy sector projects, including power transmission enhancement investment tranche-IV and Mangla power plant rehabilitation project.

Minster Dar appreciated the AFD’s continued support and assistance for economic development of Pakistan. Ambassador Dorance said the main objective of the program is to make energy sector more affordable, reliable and sustainable, supporting the country’s economic growth through expeditious implementation of the National Power Policy 2013.

“France is pleased to extend support to Pakistan in different areas,” he added. In June, AFD also co-financed a loan programme worth over $400 million of Asian Development Bank to support the country’s efforts to provide a more reliable and secure energy sector.

ADB approved financial assistance of $300 million, the third such loan under the sustainable energy sector reform programme, while AFD agreed to add €100 million as the co-financing. “As co-financing partner in the reforms project, AFD is committed to promoting green energies in Pakistan through investments in low carbon emission energy generation in line with Paris agreement approved by the Parliament of Pakistan,” Amprou of AFD said in a statement.

Under the energy sector reform programme, Pakistan has embarked on a substantial reform initiative that will reduce energy subsidies and adjust tariff policy, improve sector performance and open the market to private participation, and increase accountability and transparency.

The reform measures aim at addressing the financial viability and reduce costs to taxpayers. Specific measures include recently agreed legislation that will improve governance through more clearly defined roles for both the government and the power regulator, and reduce debt level in the energy sector.