ADB Approves US$ 284 Loan for Pakistan's Power Transmission Network

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ADB Approves US$ 284 Loan for Pakistan's Power Transmission Network

Image Attribute: ADB Country Director for Pakistan Ms. Xiaohong Yang (right) and Secretary of the Economic Affairs Division Mr. Noor Ahmed (left) after the signing. / Source: ADB

Image Attribute: ADB Country Director for Pakistan Ms. Xiaohong Yang (right) and Secretary of the Economic Affairs Division Mr. Noor Ahmed (left) after the signing. / Source: ADB

On December 13, 2018, Manila-based Asian Development Bank (ADB) and the Government of Pakistan signed loan and grant agreements worth US$ 284 million to improve Pakistan’s power transmission network. The agreements are the third tranche of a multi-tranche financing facility (MFF) under the ADB-supported Second Power Transmission Investment Program.

The ADB Country Director for Pakistan Ms. Xiaohong Yang and Secretary of the Economic Affairs Division Mr. Noor Ahmed signed the agreement at a ceremony in Islamabad on behalf of their respective organizations, said a press release issued by ADB.

"The project will help provide a more stable and secure electricity supply, so people and businesses can continue their productivity and contribution to the economy," said Ms. Yang. "ADB is working with the government and the private sector to further develop Pakistan’s power supply chain, including expanding the power transmission network."

The tranche is comprised of a US$ 280 million loan from ADB’s ordinary capital resources and a US$ 4 million grant from the High-Level Technology Fund (HLTF) to help the National Transmission & Dispatch Company Limited (NTDC) meet the country’s electricity demand of 1,150 megawatts efficiently and reliably. In an attempt to achieve this, it will deploy high-level technologies and climate-resilient transmission systems through load centers in Punjab Province.

The investment in the power transmission network — the first investment of its kind by ADB in Pakistan—will pilot large-scale, grid-connected battery energy storage system, which will help NTDC comply with national standards and best practices in power distribution. It will also enhance the NTDC’s capacity to dispatch intermittent renewable energy. This investment will also facilitate the development of ancillary services market which is an important component of the future competitive power market.

"The capacity building component of Tranche 3 will support the government in preparing an energy storage system roadmap to leverage the country’s rich indigenous renewable energy potential for longer term energy security," said Ms. Yang.

With reporting by Asian Development Bank