ISLAMABAD - The Pakistani government and the Asian Development Bank (ADB) on Thursday signed loan and grant agreements worth $284 million to improve Pakistan’s power transmission network.

The agreement was signed by ADB Country Director for Pakistan Ms Xiaohong Yang and Secretary of the Economic Affairs Division Mr Noor Ahmed at a ceremony in Islamabad.

The tranche is comprised of a $280 million loan from ADB’s ordinary capital resources and a $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. To achieve this, it will deploy high-level technologies and climate-resilient transmission systems through load centers in Punjab Province.

The agreement is the third tranche of a multi-tranche financing facility (MFF) under the ADB-supported Second Power Transmission Investment Program. The MFF aims to develop a stronger, smarter, greener, and more climate resilient power transmission system in Pakistan.

The NTDC is the implementing agency of the Tranche 3 Project under the existing Multi-tranche Financing Facility amounting to US$ 810 million. Certain Components of the Investment Program will be implemented by Central Power Purchasing Agency (Guarantee) Limited (CPPA-G) including certain capacity components, as set out in the legal agreement for each tranche. The Project objective is to attain improved coverage, reliability, transparency and quality of the power transmission service in the Project areas.

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 Project shall comprise of the following activities including construction of 500/220/132 kV Lahore North substation with six 500 kV line bays, six 220 kV line bays, and two 132 kV line bays, including installation of four 750 MVA, 500/220 kV and three 250 MVA, 220/132 kV transformers along with allied equipment and accessories and installation of approximately 194 km of associated double circuit transmission lines.

The project also include the construction of 500 kV switching station at Maira with 8 line bays and 4 shunt reactor banks along with allied equipment and accessories. Other project included construction of the 220 kV substation at Jauharabad with four 220 kV line bays and eight 132 kV line bays, including installation of three 160 MVA, 230/132 kV transformers along with allied equipment and accessories. The two other projects are installation of lithium-ion battery packs (5 MWh) and installation of balance of system including inverters (20MW).

The Project is expected to be completed by 30th June 2023. The project when completed is expected to address some critical bottlenecks in distribution system of NTDC and will facilitate uninterrupted and reliable supply of electricity of 1150 MW in project area. The impact of Tranche 3 is improved transmission infrastructure and improved energy market transparency whereas the outcome of Tranche 3 is improved coverage reliability, transparency and quality of the power transmission service in Project areas.

“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 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.

ADB is committed to achieving a prosperous, inclusive, resilient, and sustainable Asia and the Pacific, while sustaining its efforts to eradicate extreme poverty. Established in 1966, it is owned by 67 members—48 from the region. In 2017, ADB operations totaled $32.2 billion, including $11.9 billion in cofinancing.