ISLAMABAD: The Asian Development Bank (ADB) on Tuesday approved an $810 million multi-tranche financing facility to develop the country’s power transmission system.
The facility would improve the reliability and quality of energy supply in the country while would also meet increasing demand for electricity, Manila based bank said in a statement. A reliable and sustainable power sector is critical to the economic growth and well being of Pakistan,” the statement quoted Megan Wolf, energy specialist with ADB’s Central and West Asia Department as saying.
“Fast implementation of this facility and related reforms to alleviate power shortages will improve the prospects for the economy.” The statement said the loan facility will help fund the staged rehabilitation and expansion of the transmission network, increasing transmission capacity and energy efficiency and security.
It will also support government efforts to develop a more transparent and efficient power sector by promoting reforms in the National Transmission and Despatch Company Limited, and the sector’s newly established commercial operator, the Central Power Purchasing Agency (Guarantee) Limited. ADB’s facility will be delivered in tranches, implemented from 2016 to 2026.
The statement said power shortages are a major obstacle in Pakistan’s economic development. “With demand for electricity outpacing supply, inefficient and inadequate transmission and distribution systems are key bottlenecks in the development of the energy sector that is stifling growth and threatens social strife,” it added.
ADB is Pakistan’s largest development partner in the energy sector with investments including five multi-tranche financing facilities, as well as providing support for policy reforms, energy planning, preparation of feasibility studies, capacity development, and promotion of regional power and gas trading initiatives.
ADB’s assistance is helping the government to address the persistent energy crisis through Vision 2025, Pakistan’s comprehensive plan for economic growth. The plan aims to increase power generation, provide uninterrupted electricity to all, and improve demand management. ADB is dedicated to reducing poverty in Asia and the Pacific through inclusive economic growth, environmentally sustainable growth, and regional integration. In 2015, ADB assistance totaled $27.2 billion, including co-financing of $10.7 billion.