The Asian Development Bank (ADB) has approved a $330 million loan to support Pakistan’s Second Power Transmission Strengthening Project, aimed at improving the reliability and capacity of the national grid.
The financing will support the construction of a 290-kilometre, 500-kilovolt transmission line, alongside major upgrades to grid stations in Islamabad and Faisalabad. According to ADB, the project will enable the transfer of up to 3,200 megawatts of clean energy from the north, reducing reliance on imported fuels and helping lower overall power costs.
It is unclear where precisely this line will be deployed. Other transmission lines include the Dasu Transmission Line that connects Islamabad West to the Dasu Hydropower plant via Mansehra; however, “irregularities” and “non-transparent tendering” have caused financial losses in that project.
Read: Government touts cheaper electricity for factories, but businesses aren’t buying it
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 lending.
“By expanding transmission capacity and enabling the delivery of low-cost hydropower, the project aims to improve access to clean energy in the power mix, reduce system costs, and support Pakistan’s long-term and sustainable economic development,” said ADB Country Director for Pakistan Emma Fan.
This move comes in a larger effort on the part of the government, as it is seeking roughly $1 billion from the World Bank and ADB for “reforms” and “budget support” to cushion foreign exchange reserves, rather than just project-specific costs. ADB has also said that the power sector’s “high costs” and “circular debt” (projected to rise 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 breakdowns, supporting a more stable supply network.
ADB said the project aligns with Pakistan’s National Power Policy 2021 and Vision 2025, both of which prioritise expanding clean-energy transmission and improving the performance of the national grid.
