ADB agrees $810m loan to improve Pakistan’s power grid

23 Aug 16

The Asian Development Bank has approved a $810m loan to develop Pakistan’s power transmission system, it was announced today.

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Man fixing power lines in Pakistan

Man fixing power lines in Pakistan

 

The aim is to improve the quality and reliability of the country’s energy supply, and meet increasing demand for electricity. The finances will be delivered in a series of tranches until 2026.

At the end of June, the ADB approved a separate $600m loan to reform Pakistan’s public sector, of which power distribution companies were to be one of the main beneficiaries.

Megan Wolf, energy specialist with the ADB’s Central and West Asia Department, said: “Fast implementation of this facility and related reforms to alleviate power shortages will improve the prospects for the economy.”

The loan will to rejuvenate and expand the transmission network and increase capacity, energy efficiency and security. It is aimed at supporting government efforts to develop a more transparent and efficient power sector by promoting reforms in the National Transmission and Despatch Company, and also the sector’s newly established commercial operator, the Central Power Purchasing Agency.

According to the ADB, power shortages are a major barrier to Pakistan’s economic development. Demand for electricity is outpacing supply, and inefficient and inadequate transmission and distribution systems are “key bottlenecks” in the development of the energy sector, stifling growth and threatening social strife.

The bank is Pakistan’s largest partner in the energy sector with existing investments including five multi-tranche financing facilities. It is supporting policy reforms in the country through energy planning, preparation of feasibility studies, capacity development, and promotion of regional power and gas trading initiatives. 

This assistance is aimed at ing the government to address the energy crisis through the Vision 2025 programme, the Pakistani government’s plan for economic growth. The plan aims to increase power generation, provide uninterrupted electricity to all citizens, and improve demand management. 

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