The Asian Development Bank (ADB) has approved a $330 million loan to support Pakistan’s Second Power Transmission Strengthening Project, which aims to improve the reliability and capacity of the national grid.
The funding will support the construction of a 290-kilometer, 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 dependence on imported fuel and helping to lower overall power costs.
It is unclear where exactly this line will be deployed. Other transmission lines include the Dasu Transmission Line connecting Islamabad West to the Dasu Hydropower Plant via Mansehra; however, “irregularities” and “non-transparent bidding” have caused financial losses in the project in question.
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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 loans on favorable terms.
“By expanding transmission capacity and enabling the provision 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.
The move comes in a larger effort by the government as it seeks about $1 billion from the World Bank and ADB for “reforms” and “budgetary support” to mitigate foreign exchange reserves, rather than just project-specific costs. The ADB has also said that the power sector’s “high costs” and “circular debt” (expected to rise by another Rs 500 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 the frequency of outages, supporting a more stable supply network.
ADB said the project is in line with Pakistan’s National Energy Policy 2021 and Vision 2025, both of which prioritize expanding clean energy transmission and improving the performance of the national grid.
