ISLAMABAD - Pakistan on Wednesday signed two loan agreements worth $565 million with World Bank to support the projects in energy and water sectors.

The World Bank would give loan worth $425 million for the National Transmission Modernisation (Phase-I) Project and $140 million for Sindh Barrages Improvement Project. Syed Ghazanfar Abbas Jilani, secretary Economic Affairs Division (EAD), signed the loan agreements on behalf of Pakistan while representatives of government of Sindh and National Transmission Despatch Company signed the project agreements of their respective projects. Patchamuthu Illangovan, country director WB, signed the agreements on behalf of the World Bank.

The $425 million loan will be used to modernise the national transmission system by rehabilitating selected 500kV and 220kV substations and transmission lines. The total cost of the project is $536.33 million. The World Bank will finance $425.0 million and $111.33m will be borne by the NTDC. The government had decided to modernise the national power transmission to provide an immediate relief to the overall national transmission and dispatch system, which is under stress due to inadequate transformation capacity. Pakistan had sought financing from the World Bank for the modernisation of power sector. The first phase will involve upgradation and extensions to existing substations, modification to transmissions towers and lines, and the construction of new substation sites across the country.

The objective of the project is to increase the capacity and reliability of selected segments of the national transmission system in Pakistan and modernise key business processes of the national Transmission and Despatch Company (NTDC). The project will support investments in high-priority transmission infrastructure, information and communication technology (ICT), and technical assistance (TA) for improved management and operations. Infrastructure investments will create new assets or rehabilitate existing parts of the system transmission substations, transmission lines, or a combination of the two. The project will establish a robust ICT infrastructure and roll out an Enterprise Resource Planning (ERP) system to enhance the efficiency of management and operations. The TA will help the NTDC implement the project and will improve the company’s capacity for sustainable system operation.

Meanwhile, the WB approved $140 additional financing for Sindh Barrages Improvement Project. The project’s development objectives are to improve the reliability and safety of the Guddu barrage and strengthen the Sindh Irrigation Department’s capacity to operate and manage the barrage.

The additional financing will help to scale up activities under the original project (Sindh Barrages Improvement Project) whose scope at present is limited to rehabilitating and modernizing Guddu Barrage. With the AF, the project will support the rehabilitation and modernisation of Sukkur Barrage and also support improving the operation and maintenance (O&M) of the three barrages over the Indus River in Sindh Province – Guddu, Sukkur, and Kotri Barrages – through better coordination and monitoring. The total estimated amount of the additional finance required under the AF is $152.2 million, which will be financed by the AF ($140.0 million) and incremental counterpart funds ($12.2 million) by the government of Sindh.

The secretary Economic Affairs Division (EAD) thanked the World Bank for extending its continuous support to government of Pakistan in its efforts to achieve sustainable economic development in the country.