| Project Detail |
In October 2022, ADB received the project financing request from the government of Pakistan to finance the enhancement of the NTDC transmission grid through a loan totaling $189 million from ADBs Ordinary Capital Resources (OCR). The proposed project will finance the construction of high-voltage transmission infrastructure and procurement of materials required for asset management and reduction of transmission system constraints. Tranche 4 will support NTDC in meeting growing electricity demand efficiently and reliably at the load centers of Punjab, Sindh and Khyber Pakhtunkhwa provinces through the construction of the transmission network and augmentation of the existing substations. In addition, the equipment and goods to be procured under Tranche 4 will be utilized to restore the transmission lines damaged during the recent floods and the other damages to be identified in the disaster recovery framework under preparation by the government with the support from ADB, World Bank, EU, and the UN.
Project Name Second Power Transmission Enhancement Investment Program (Tranche 4)
Project Number 48078-006
Country / Economy Pakistan
Project Status Approved
Project Type / Modality of Assistance Loan
Source of Funding / Amount
Loan 4271-PAK: MFF Power Transmission Enhancement Investment Program II Tranche 4
Ordinary capital resources US$ 189.00 million
Strategic Agendas Environmentally sustainable growth
Inclusive economic growth
Drivers of Change Gender Equity and Mainstreaming
Governance and capacity development
Sector / Subsector
Energy / Electricity transmission and distribution
Gender Equity and Mainstreaming Effective gender mainstreaming
Description In October 2022, ADB received the project financing request from the government of Pakistan to finance the enhancement of the NTDC transmission grid through a loan totaling $189 million from ADBs Ordinary Capital Resources (OCR). The proposed project will finance the construction of high-voltage transmission infrastructure and procurement of materials required for asset management and reduction of transmission system constraints. Tranche 4 will support NTDC in meeting growing electricity demand efficiently and reliably at the load centers of Punjab, Sindh and Khyber Pakhtunkhwa provinces through the construction of the transmission network and augmentation of the existing substations. In addition, the equipment and goods to be procured under Tranche 4 will be utilized to restore the transmission lines damaged during the recent floods and the other damages to be identified in the disaster recovery framework under preparation by the government with the support from ADB, World Bank, EU, and the UN. The project will have two outputs. Output 1 will include six subprojects to add a total of 2,680 MVA in substation capacity and about 350 km of transmission lines and procurement of goods for operation and maintenance of NTDC assets to reduce the substations breakouts. An additional electricity sale of 13,481 GWh and associated transmission network loss reduction of 135 GWh are expected due to the project upon commissioning in 2026. Output 2 will involve support to gender mainstreaming in NTDC and increasing number of female professionals. The project is linked and sequenced with the MFF earlier projects. The proposed project is expected to have the positive medium to long term impact on the overall power sector and economy of Pakistan by addressing the emerging needs of the transmission network post floods, scaling up the transmission infrastructure to be at par with the increasing generation capacity contributing to the revival of post pandemic and post-calamity economy of the country and reduction of the circular debt through reliable and unconstrained electricity transmission. The project is aligned with ADB Strategy 2030 operational cluster 3 on infrastructure and economic connectivity and supports four operational priorities: (i) addressing remaining poverty and reducing inequalities; (ii) accelerating progress in gender equality; (iii) tackling climate change, building climate and disaster resilience, and enhancing environmental sustainability; and (iv) strengthening governance and institutional capacity. It is in line with ADB CPS, 2021-2025 for Pakistan. The proposed project supports Pakistan NDC mitigation measure on upgrading the transmission network and is aligned with the Paris Agreement criteria. It will contribute to the annual carbon dioxide emission savings of about 177,193 tons which accounts for energy efficiency and energy savings that will come from the use of high temperature low sag conductors and reduced technical losses. The proposed tranche 4 meets the selection criteria set forth in schedule 4 of the MFF FFA. The project is categorized effective gender mainstreaming (EGM) aiming to support NTDC in institutionalizing gender focused aspects in its operations.
Project Rationale and Linkage to Country/Regional Strategy Key issues faced by Pakistan power sector include (i) recurring circular debt, (ii) an unsustainable and unaffordable energy mix with heavy reliance on imported fuel-based electricity generation, (iii) a stressed transmission and distribution network, and (iv) the slow pace of reforms. Lack of access to grid electricity affects 34% of the population and is one of the main constraints to inclusive sustainable growth. Vulnerability to climate change and natural disasters poses an additional significant challenge to the sustainable and reliable electricity supply, as witnessed by the monsoon rains and the subsequent flashfloods in July and August 2022, which wreaked tremendous devastations in Pakistan. The proposed project is expected to have the positive medium to long term impact on the overall power sector and economy of Pakistan by addressing the emerging needs of the transmission network post floods, scaling up the transmission infrastructure to be at par with the increasing generation capacity contributing to the revival of post pandemic and post-calamity economy of the country and reduction of the circular debt through reliable and unconstrained electricity transmission. The project is aligned with ADB Strategy 2030 operational cluster 3 on infrastructure and economic connectivity and supports three operational priorities: (i) addressing remaining poverty and reducing inequalities; (ii) accelerating progress in gender equality; and (iii) tackling climate change, building climate and disaster resilience, and enhancing environmental sustainability. It is in line with ADB CPS, 2021-2025 for Pakistan. The proposed project supports Pakistan NDC mitigation measure on upgrading the transmission network and is aligned with the Paris Agreement criteria. It will contribute to the annual carbon dioxide emission savings of about 177,193 tons which accounts for energy efficiency and energy savings that will come from the use of high temperature low sag conductors and reduced technical losses. The proposed tranche 4 meets the selection criteria set forth in schedule 4 of the MFF FFA. The project is categorized effective gender mainstreaming (EGM) aiming to support NTDC in institutionalizing gender focused aspects in its operations.
Impact
The improved transmission infrastructure and management, and energy market transparency and efficiency aligned with the National Power Policy 2013 and Pakistan 2025: One Nation, One Vision |
