World Bank Approves $12 Billion Loan to Pakistan

The World Bank has approved a $12bn loan to Pakistan, the country's finance ministry said on Friday.

$1bn of the total will be transferred to Pakistan in the next week according to the ministry, which is set to be used to boost the country's energy sector and reduce poverty.

"Staying on the structural reform path is important for competitiveness of the economy, which in turn is essential for creating jobs and lifting millions out of poverty in Pakistan," World Bank Vice President Phillipe Le Houerou said in a statement.

Pakistan is in the middle of an energy crisis as power shortages continue to stifle economic growth and spur political dissent.

Supplies have failed to keep pace with economic growth in the country and blackouts, which have plagued Pakistan for years, have lengthened as the country's economy expands.

The South Asian nation has sought to attract foreign investment and reduce chronic mass unemployment.

The rest of the $12bn will be dispersed over five years, and will carry a 2% interest rate.

"Awide range of stakeholders including, civil society, media youth, parliamentarians, and federal and provincial governments were consulted. The new strategy is structured to help the country tackle the most difficult, but potentially transformational areas to reach the twin goals of poverty reductions and shared prosperity," said World Bank Pakistan director Rachid Benmessaoud in a statement.