The World Bank has approved $12 billion in loans to Pakistan over the next five years to boost the country's struggling economy.
Pakistan's Finance Ministry said Friday that $1 billion will be transferred to the country in the next week. The ministry says the loan will carry an interest of two percent and the funds will target the energy, education and security sectors.
In announcing the loan package, the World Bank's South Asia Region vice president said Pakistan's government "deserves appreciation for stabilizing the economy, initiating reforms in the power sector, as well as revenue mobilization and drawing in the private sector for spurring growth."
The World Bank says $600 million of the initial $1 billion supports Pakistan's goal of developing an "efficient and consumer-oriented electric power system that meets the needs of its people and economy, sustainably and affordably."
The remaining $11 billion will be disbursed in the next five years.
Pakistan suffers from frequent power cuts lasting for hours at a time. The outages have fueled public outrage, crippled industry and triggered violent protests.
Analysts blame the electricity shortages on chronic under-investment in infrastructure, while Pakistani leaders partially blame electric companies' lack of funds.
Pakistan is also suffering from a revenue shortfall and both the World Bank and the International Monetary Fund have urged the South Asia country to reform its tax system, including increase its collection rate. Less than one percent of the population is said to file income tax.