ADB to lend Pakistan $810m to improve power infrastructure

First tranche of $150m will come this year; total loan to be distributed over 10 years

ISLAMABAD: The Asian Development Bank (ADB) approved a $810 million loan facility for Pakistan to help the country improve its dilapidated power transmission infrastructure not capable of lifting additional power generation load.

The $810 million multi-tranche financing facility will help Pakistan develop its power transmission system, improve reliability and quality of energy supply and meet the increasing demand for electricity, according to a hand-out issued by the local office of the Manila-based lending agency.

The loan will be distributed over a period of ten years with the first tranche of about $150 million coming this year. The tranche-I will be utilised for extension of transmission system in Sahiwal, Lahore, Rewat, Faisalabad and Guddu.



The total cost of Power Transmission Enhancement Investment Programme-II is over $1 billion that includes self-financing of $200 million by Pakistan.

Out of the 12 proposed sub-projects under the multi-tranche facility, as many as four grid stations will be set up in Balochistan, seven in Sindh and one in Punjab.

The loan will be used to lay down infrastructure to increase additional generation capacity currently planned or under construction, meet network safety and security requirements, and reduce system losses.

“A reliable and sustainable power sector is critical to the economic growth and wellbeing of Pakistan,” said ADB’s Central and West-Asia Department Energy Specialist Megan Wolf.

He said that fast implementation of this facility and related reforms to alleviate power shortages will improve prospects for the economy.

The loan facility will help develop a more transparent and efficient power sector by promoting reforms in the National Transmission and Dispatch Company Limited (NTDCL), and the sector’s newly established commercial operator, the Central Power Purchasing Agency (Guarantee) Limited. ADB’s facility will be delivered in tranches, implemented from 2016 to 2026.

“The PML-N government has undertaken over 10,000 megawatts power projects in its efforts to end load shedding by 2018. However, the country’s transmission system at present is not capable of lifting the additional load,” said the officials of NTDC.

The loan will consist of staged physical investments in the high-voltage transmission system, including the rehabilitation, augmentation and expansion of transmission lines, substations and supporting infrastructure.



“Power shortages are a major obstacle in Pakistan’s economic development. With demand for electricity outpacing supply, inefficient and inadequate transmission and distribution systems are key bottlenecks in the development of the energy sector that is stifling growth and threatens social strife,” said the ADB.

ADB is Pakistan’s largest development partner in the energy sector with investments including five multi-tranche financing facilities, as well as providing support for policy reforms, energy planning, preparation of feasibility studies, capacity development, and promotion of regional power and gas trading initiatives.

Most of the 500 & 220 kV grid stations located in southern areas of the country; particularly in Sindh and Baluchistan Provinces are in operation since long.

Some of the equipment installed at these grid stations, particularly the circuit breakers, isolators, current transformers and power transformers have been out dated and irrepairable as they have completed their life and need replacement.

Moreover, improvement in protection system of these grid stations is also required to avoid frequent tripping. Keeping in view the above, the rehabilitation of various 500 kV and 220 kV grid stations in south area of NTDC system includes replacement of the out-dated equipment, installation of shunt reactors, additional protection equipment including protection relays, fault recorders, fault locators and event recorders for improvement in system reliability to overcome constraints.

As a result of this implementation, frequent tripping occurring due to underrated and out-dated equipment will be avoided and the system would be able provide a stable power supply to the power distribution companies.

Published in The Express Tribune, August 24^th, 2016.

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