ISLAMABAD - Pakistan and Asian Development Bank (ADB) on Tuesday signed loan/project agreement worth $260 million for the Second Power Transmission Enhancement Investment Programme (tranche-II).

Syed Ghazanfar Abbas Jilani, secretary of Economic Affairs Division (EAD), signed the loan agreement with Xiaohong Yang, country director of ADB. The ceremony was also attended by Werner E Liepach, the visiting director general for Central & West Asian Department (CWRD), ADB.

Under the Second Power Transmission Enhancement Investment Programme (multitranche financing facility), ADB will provide $810 million, in total, over the period of 10-years. It shall support the evacuation of new generation, including that from renewable, improvement of system reliability and power supply quality through reinforcement and improved monitoring and control. It shall also help improve the financial management, regulatory relations, planning, project management, and procurement capacities of the transmission system owner and operator, the National Transmission and Despatch Company Limited (NTDC), and the sector’s newly established commercial operator, the Central Power Purchasing Agency (Guarantee) Limited (CPPA-G). These investments will increase institutional efficiency, cost recovery, competition, transparency, and good governance within the power sector.

The agreement is part of the Second Power Transmission Enhancement Investment Programme aimed to improve coverage, reliability, transparency, and quality of the power transmission service in Pakistan by expanding the 220-kV transmission network in Sindh and Balochistan provinces and upgrading the supervisory control and data acquisition (SCADA) and revenue metering systems (RMS) in the country. Tranche 2 of the Second Power Transmission Enhancement Investment Programme shall be used for financing the following four subprojects: i. 220kV Mirpur Khas substation with associated transmission ii. D.I Khan-Zhob 220kV transmission line with Zhob substation (iii) Construction of New 220 kV Guddu-Shikarpur-Uch-Sibbi Transmission Line and supervisory Control and Data Acquisition (SCADA) System and Revenue Metering System.

Upgrading the SCADA and RMS across the national grid will enable real time monitoring and control of the grid, preventing losses, reducing power outages, and increasing grid stability and capacity. It will also feed computerized metering data complying with the grid code into the system for settlement of the market operator, the Central Power Purchasing Agency (Guarantee) Limited (CPPA-G), to streamline revenue collection, billing and payment processes, as well as create the foundation for an energy trading platform.

The power transmission network upgrade will also help off-take power from new and renewable power plants to the national grid and on the load centers enhancing Pakistan’s energy security.

“A reliable and strong transmission network is essential to ensure uninterrupted supply of power for the industry and to propel economic growth,” said Liepach. “ADB remains committed to work with the government of Pakistan to develop a larger, stronger, smarter, and climate resilient power transmission network.”