The Asian Development Bank and Pakistan signed on Friday a $248-million loan agreement to upgrade the country’s power transmission operations and management in a bid to boost energy security.
The agreement has been signed at a time when the government is struggling to enhance power transmission capacity as the existing system cannot sustain the load of additional transmissions, facing danger of complete breakdown of the system.
Economic Affairs Division Secretary Saleem Sethi and ADB’s Country Director for Pakistan Werner Liepach signed the loan agreement with the project due to complete by the end of 2016.
Expanding and upgrading the transmission backbone will provide reliable and high-quality energy supplies to meet increasing demand from industrial, commercial, agricultural and domestic customers, said Liepach while speaking at the occasion.
“Fresh lending will support the government’s strategy to provide people with better access to affordable electricity.”
The loan, which is the fourth under ADB’s multi tranche financing facility for the Power Transmission Enhancement Investment Program, will fund 10 subprojects.
These will include providing system upgrades to evacuate power generated from new thermal, wind and hydro power plants and reduce power losses, including measures to strengthen network safety and security requirements.
The infrastructure to be built or upgraded includes 281 kilometres of 500-kilovolt (kV) transmission lines from the Muzaffargarh grid station, four new 220-kV grid stations, and an extension of 500-kV grid stations at Jamshoro and Gujranwala.
This is the final tranche of the $800 million financing facility which was originally approved in December 2006. The National Transmission and Despatch Company will continue as the executing and implementing agency for the programme.
The fourth $248-million transmission tranche is aimed at improving the energy supply and security by reducing transmission infrastructure bottlenecks. Additionally, it is meant to reduce transmission losses and expand the national system by connecting generation sources and load centres, according to a handout issued by the Ministry of Finance.
As many as four new grid stations of 220 kv will be constructed in Dera Ismail Khan, Nowshera, Lalian and Chakdra. A new transmission line of 500 kv will also be constructed for dispersal of power from 747MW Power Plant at Guddu.
The secretary EAD appreciated ADB’s investments for the Jamshoro Coal Power Project, budgetary support programme for the energy sector. The ADB is also planning to lend multi-tranche Financing Facility (MFF) for the Smart Metering System amounting to $ 990 million, stated the Finance Ministry.
The government is currently reviewing its implementation strategy in the power sector. It has been shutting down the fuel guzzlers and wants to change the fuel mix by adding coal-based power plants. However, the transmission line obstacles are feared to hamper more additions to the power system.
Published in The Express Tribune, December 13th, 2014.
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