ADB offers $800m loan to boost power sector in Pakistan

26 November 2015 (Last Updated November 26th, 2015 18:30)

Asian Development Bank has signed two loan agreements with the Government of Pakistan totalling around $800m, which is aimed to strengthen the power sector infrastructure in the country.

Sheikhpura power grid station

Asian Development Bank has signed two loan agreements with the Government of Pakistan totalling around $800m, which is aimed to strengthen the power sector infrastructure in the country.

The first agreement for a $400m loan has been signed for tranche 1 of the Multitranche Second Power Distribution Enhancement Investment Programme.

Pakistan intends to use the funding for installing an Advanced Metering Infrastructure (AMI) system for power distribution firms across the country.

The metering system is expected to increase load management capacity for the companies and enhance the sector’s financial capabilities by reducing power losses and boosting its revenue collection.

Another $400m has been allowed by ADB for the second sub-programme of the Sustainable Energy Sector Reform Programme in Pakistan.

This investment is expected to support the ongoing policy reforms in the country, which aims to develop an affordable, efficient and secure energy sector.

"The two programmes are major steps towards resolving Pakistan’s energy crises."

ADB Pakistan country director Werner E. Liepach said: "The two programmes are major steps towards resolving Pakistan’s energy crises.

"The state-of-the-art new metering system will minimise losses and allow effective load management and transparency, thus ensuring a robust and sustainable power supply needed to lift growth and job creation."

Power crisis in the country has been holding up its economic development, with the energy sector suffering due to scarce supplies and inefficient and inadequate transmission and distribution systems.

In August, the country had initiated construction works for the 1.1GW Karachi Nuclear Power Plant II (Kanupp II), in order to support the growing energy demands.


Image: The Sheikhpura 500kVA electricity grid station in Pakistan. Photo: courtesy of Asian Development Bank.