World Bank approves $375.9m for Pakistan’s grid stability project
The World Bank's (WB) Board of Executive Directors has approved $375.9 million in financing for Pakistan’s Grid Stability Enhancement Project to strengthen the country's national power transmission network under the Boosting Energy Security through Transmission in Pakistan (BEST-PAK) Multiphase Programmatic Approach (MPA).
According to a press release issued by WB, the project is the first phase of a 10-year programme to help Pakistan modernise its electricity transmission network, reduce power outages, and bring more clean energy to homes, businesses, and industries.
"Pakistan's energy challenges are deeply interconnected with its broader economic stability," WB Country Director for Pakistan Bolormaa Amgaabazar said.
"By investing in advanced technologies for more resilient transmission infrastructure, this project will contribute to reducing electricity costs, bringing more renewable energy onto the grid, and laying the groundwork for a power sector that works better for households, businesses and industries, as well as overall Pakistan’s economy," she further added.
The statement further noted that Pakistan's electricity network has long struggled with grid instability and transmission bottlenecks that limit the delivery of reliable power and leave clean energy generation underutilised. These constraints affect millions of Pakistanis every day through frequent outages, higher electricity costs, and lost economic opportunities.
The project will install advanced equipment to stabilise the transmission grid and improve electricity flow at key substations. This includes Static Synchronous Compensators (STATCOMs) at three major 500 kV substations, as well as fixed reactors and capacitor banks across 26 grid substations.
The upgrades will help bring 640 MW of currently curtailed wind energy onto the grid, enabling the full use of 1,840 MW of wind capacity in southern Pakistan by moving power to major demand centres. The project will also support the integration of around 491 MW of planned private sector-led renewable energy projects.
"Together, these improvements will help Pakistan move towards its national commitment of achieving 60 per cent renewable energy in its electricity mix by 2030," the press release said, adding that the project is expected to avoid approximately 832,500 tonnes of CO₂ emissions annually, or more than 20.8 million tonnes cumulatively over 25 years.
Read: WB trims $400m program rating
WB Lead Energy Specialist for the BEST-PAK programme in Pakistan, Waleed Saleh Alsuraih, said, "A reliable and modern transmission grid was essential for Pakistan's energy future".
"As the first phase of the BEST-PAK programme, it unlocks a pathway to large-scale clean energy deployment, stronger energy security, and a modern, commercially oriented transmission sector through targeted infrastructure investments and institutional reforms, creating the conditions for future private capital participation," he said.
The press release said, "the project also advances the government's ongoing transmission-sector reform agenda, centred on the restructuring of the National Transmission & Dispatch Company (NTDC) into specialised successor entities".
It added that the project supports reforms designed to strengthen governance, accountability, operational performance and the long-term sustainability of the power sector.
According to the press release, Pakistan is among the countries most exposed to climate-related risks, including river and urban flooding and extreme heat events. The project's design accounts for these realities by requiring all new installations to meet climate-resilient specifications, including elevated platforms above ground to mitigate flood exposure and equipment designed to operate in temperatures of up to 55°C'
"These measures will help ensure reliable performance during monsoon seasons and heatwaves," the press release added.