Islamabad- The Government of Pakistan has been given a $400 million (£237.8m) loan by the Asian Development Bank to tackle the country’s “chronic energy crisis” says a report today.

Its economy has been destroyed as a result of power shortages which are estimated to have slowed the GDP growth by at least 2% a year. The Government of Pakistan is in the process of implementing the ‘National Power Policy’ in a bid to help resolve the problems.

ADB’s reform programme will support the overhaul of existing tariffs and subsidies as the government plans on cutting the latter by 2016, except for low income consumers. It will also back reforms to reduce power losses and encourage more private sector involvement and improving transparency in the sector.

ADB Director General for the East Asia Department, Klaus Gerhaeusser, said: “The loan is part of an assistance program which will underwrite reforms needed to make the energy sector affordable, reliable, sustainable and secure. This in turn will accelerate industrial activity needed to boost economic growth and help create jobs, which are the key to reducing poverty levels.”