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Country/Project Title: Pakistan/Power Distribution Enhancement Investment Program

Lending/Financing

Modality: Multitranche Financing Facility

Department/ Division:

Central and West Asia Department/ Infrastructure Division

I. POVERTY ANALYSIS AND STRATEGY

A. Linkages to the National Poverty Reduction Strategy and Country Partnership Strategy

Major interventions in the energy sector are designed to achieve economic progress through infrastructure development. Both physical investment support and sector reform are necessary so that the benefits from economic growth will accrue to the poor.

By strengthening and expanding distribution capacity, the proposed Investment Program is expected to result in quality and reliable delivery of services to customers, particularly benefiting commercial, residential, and agricultural customers in Pakistan.

Poor and vulnerable customers, including social utilities such as hospitals and schools, are often the hardest hit by inadequate power supply, load shedding, and poor power quality. They will benefit directly from the subprojects. Direct positive economic and social benefits will result from the Investment Program.

A positive, direct impact on local labor is expected during implementation and an indirect impact will be due to the increased income-earning opportunities generated by increased access to electricity and job opportunities during construction.

B. Poverty Analysis Targeting Classification: General intervention

1. Key Issues

Project preparatory technical assistance consultants have prepared a social impact assessment and a poverty impact assessment. A socioeconomic survey was undertaken to provide a basis for the assessments. The primary objective of this study is to (i) assess whether the benefits of the Project will flow primarily to poor/nonpoor customers; (ii) design the poverty intervention component of the Project; and (iii) identify and deal effectively with any social risks such as involuntary resettlement, gender, labor, affordability, including the need to prepare any mitigating measures or plans.

Most poor people in Pakistan are wage laborers or are self-employed. Over 40% of them live close to the poverty line; this indicates that shocks, such as illness, death, or drought, have the potential to drive large numbers into poverty. Most are landless and less likely to have access to a health clinic or to send their children to school than those with higher incomes. A disruption of their daily routine makes them more vulnerable than other groups as they do not have the resources to insure against such disruptions.

The Investment Program is expected to create new full-time employment opportunities in civil works. Improved power supplies will induce light industrial and commercial activity, creating employment and improving the productivity and quality of outputs in manufacturing and agriculture sectors.

II. SOCIAL ANALYSIS AND STRATEGY

A. Findings of Social Analysis

The Investment Program will benefit all grid-connected customers with adequate and reliable supply of electricity, which would support the projections for growth in energy demand and the Government’s confirmed intent to make affordable grid-based electricity supplies available to the entire population through the village electrification program. A secure and predictable electricity supply will enable social and economic benefits to materialize. Poor and vulnerable customers, including hospitals, schools, and other social utilities, are often hardest hit by inadequate power supply, load shedding, and poor power quality. They will benefit directly from the investments.

Improvements in the quality and reliability of supply that will accrue from targeted investments are expected to improve living conditions in the rural areas through the creation of job and income opportunities. Businesses as well as farmers are expected to increase their productivity. Demand for electric installations, supplies, and maintenance is expected to increase, creating

further new job opportunities. In addition, a reliable electricity supply improves households’ quality of life, especially for women who are traditionally responsible for the activities inside the house.

B. Consultation and Participation

1. Provide a summary of the consultation and participation process during the project preparation.

Stakeholder analysis has been undertaken. All stakeholders have been actively involved in order to reduce the likelihood of grievances and to ensure that benefits are distributed fairly. In addition, for the selection of unskilled labor in the project area, the contractors will consult with local township labor officials, local village leaders, and jirgas (tribal assembly of elders); and will ensure that labor is hired on a nondiscriminatory basis.

2. What level of consultation and participation (C&P) is envisaged during the project implementation and monitoring? Information sharing Consultation Collaborative decision making Empowerment

3. Was a C&P plan prepared? Yes No

If a C&P plan was prepared, describe key features and resources provided to implement the plan (including budget, consultant input, etc.). If no, explain why.

C. Gender and Development

1. Key Issues

The poor and women were included in participatory activities.

2. Key Actions. Measures included in the design to promote gender equality and women’s empowerment—access to and

use of relevant services, resources, assets, or opportunities and participation in decision-making process: Gender plan Other actions/measures No action/measure

Summarize key design features of the gender plan or other gender-related actions/measures, including performance targets, monitorable indicators, resource allocation, and implementation arrangements.

III. SOCIAL SAFEGUARD ISSUES AND OTHER SOCIAL RISKS

Issue

Significant/Limited/ No Impact

Strategy to Address Issue

Plan or Other Measures Included in Design Involuntary

Resettlement

Limited The proposed subprojects involve the construction of high-voltage transmission lines and substations. Some land acquisition is required, although impacts on individual households will be limited. Full Plan Short Plan Resettlement Framework No Action

Indigenous Peoples No impact

The subprojects identified so far will not have significant impacts on indigenous peoples. However, an indigenous peoples development framework was prepared to cover any impact the subprojects may have under future tranches.

Plan Other Action Indigenous Peoples

Framework No Action

Issue Significant/Limited/ No Impact Strategy to Address Issue

Plan or Other Measures Included in Design

Labor

Employment opportunities

Labor retrenchment Core labor standards

Significant

Positive impacts are expected. The subprojects will require construction labor and will result in permanent employment for the operation and maintenance of project facilities. Plan Other Action No Action Affordability No impact

The subprojects are unlikely to result in increased prices of goods and services accessed by the poor.

Action No Action

Other Risks and/or Vulnerabilities

HIV/AIDS Human trafficking Others(conflict, political instability, etc), please specify

No impact No other significant risks

were identified. Plan

Other Action No Action

IV. MONITORING AND EVALUATION

Are social indicators included in the design and monitoring framework to facilitate monitoring of social development activities and/or social impacts during project implementation? Yes No