ADB approves $200m loan to modernise Pakistan's power distribution sector

The Asian Development Bank (ADB) has approved a $200 million loan to support Pakistan in modernising its power distribution infrastructure and improving the reliability of its electricity supply.

The Power Distribution Strengthening Project aims to enhance the country’s power distribution systems to meet the rising demand for electricity and address key challenges such as energy losses, climate risks, and the resilience of infrastructure.

The project will focus on upgrading the electricity distribution systems, especially in three major companies: Lahore Electric Supply Company (LESCO), Multan Electric Power Company (MEPCO), and Sukkur Electric Power Company (SEPCO). The improvements will help reduce energy losses during transmission and boost the efficiency and sustainability of energy delivery in these areas.

Yevgeniy Zhukov, ADB’s Director General for Central and West Asia, highlighted the importance of reliable electricity in improving the quality of life. He noted that the project would include measures to reduce losses and protect revenue, which would ease the financial pressures on Pakistan's power sector.

Key elements of the project include the installation of over 332,000 advanced metering infrastructures and data management systems, as well as 15,800 online transformer performance monitoring systems across the three distribution companies.

Additionally, four grid stations in SEPCO will be upgraded, and 25 grid stations in LESCO will be constructed and modernized with new equipment to enhance efficiency.

The project will also replace high-loss 11 kV feeder lines with aerial bundled conductor cables and improve feeder line configurations, ensuring better grid performance and reducing energy losses. The upgrades will allow for quicker fault identification and isolation, particularly during extreme weather conditions, minimizing outages.

In addition to infrastructure improvements, the project will explore policy recommendations and reforms to enhance the operational efficiency of the three distribution companies.

Since joining ADB, Pakistan has received over $52 billion in loans, grants, and financing, helping to support inclusive economic growth and infrastructure development across various sectors, including energy, transport, food security, and social services.