The Asian Development Bank (ADB) has approved a $330 million loan to support Pakistan’s second Power Transmission Enhancement Project, aimed at improving the reliability and capacity of the national grid.
The funding will support the construction of a 290-kilometer, 500-kilovolt transmission line, as well as significant upgrades to network stations in Islamabad and Faisalabad. According to the ADB, the project will enable the transfer of up to 3,200 megawatts of clean energy from the north, reducing dependence on imported fuels and helping to reduce overall energy costs.
It is not clear where exactly this line will be deployed. Other transmission lines include the Dasu Transmission Line which connects Islamabad West to Dasu Hydroelectric Power Station via Mansehra; however, “irregularities” and “non-transparent tenders” caused financial losses in this project.
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The ADB described the approval as a reflection of its strong partnership with Pakistan and said its cooperation on energy sector reforms would continue. The loan package includes $285 million in commercial financing and $45 million in concessional loans.
“By increasing transmission capacity and enabling the provision of low-cost hydroelectric power, the project aims to improve access to clean energy in the energy mix, reduce system costs and support Pakistan’s long-term sustainable economic development,” said Emma Fan, ADB Country Director for Pakistan.
The move is part of a larger effort by the government, which is seeking around $1 billion from the World Bank and ADB for “reforms” and “budgetary support” to cushion foreign exchange reserves, rather than just project-specific costs. The ADB also said that “high costs” of the power sector and “circular debt” (which is expected to increase by another Rs500 billion) remain unresolved threats to Pakistan’s stability.
The National Grid Company (formerly NTDC) has been appointed as the executing agency for the project. Officials noted that the new transmission line is expected to reduce system losses and frequency of outages, thereby promoting a more stable supply network.
The ADB said the project aligns with Pakistan’s National Energy Policy 2021 and Vision 2025, both of which prioritize the development of clean energy transportation and improving the performance of the national grid.
