The Asian Development Bank (ADB) on Thursday approved a total of $330 million in loans for Pakistan’s ‘Second Power Transmission Strengthening Project’.
The project is one of the government’s ‘highest priority investments’, aiming to expand the national transmission network and bring low-cost renewable energy and hydropower to major load centers, an ADB press release said.
According to the ADB, the project will construct about 290 kilometers of new 500 kV transmission lines, in addition to upgrading ‘critical grid infrastructure’ supplying Islamabad and Faisalabad.
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The ADB said that “this investment will address long-standing bottlenecks in Pakistan’s North-South Power Corridor, enabling the transmission of up to 3,200 MW of clean energy from hydropower plants in the north of the country, reducing dependence on imported fuel, improving energy security, and helping Pakistan transition to an affordable and sustainable energy mix.”
According to ADB, this initiative supports Pakistan’s broader power sector reforms, and also contributes to the reform of state-owned enterprises (SOEs), as it strengthens the institutional, financial, operational, and governance improvements of the National Grid Company of Pakistan Limited (NGC), and puts it on the path to becoming a modern grid operator.
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The statement added that the NGC will be responsible for the implementation of the project.
According to the press release, the ADB financing package includes a $285 million loan, which will be provided from the bank’s general capital resources, while a concessional loan of $45 million is also included.
This financing will help NGC expand and modernize transmission assets, improve institutional capacity, strengthen financial discipline, and advance public awareness and gender equality initiatives.
The press release quoted ADB Country Director for Pakistan Emma Fan as saying that the project reflects ADB’s strong partnership with Pakistan and our mutual commitment to accelerating the transition and integration of clean energy, and achieving a strong and sustainable energy sector.
According to the statement, the project aims to improve access to clean energy in the energy mix by increasing transmission capacity and enabling low-cost hydropower transmission, reducing system costs, and supporting Pakistan’s long-term and sustainable economic growth.
The press release added that the Second Power Transmission Strengthening Project is in line with Pakistan’s National Power Policy (2021), Vision 2025, and Nationally Determined Contributions (2021), which emphasize energy security, climate resilience, affordable clean energy, and sustainable development.
The new infrastructure will also reduce technical losses, increase grid reliability, and strengthen the financial sustainability of the power sector, according to the statement.
ADB reiterated its commitment to “working with Pakistan and development partners to advance reforms, improve sector governance, and expand access to greener and more reliable electricity.”
