ADB to Provide $260 Million Loan for Pakistan Power Transmission Network Upgrade

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(BE2C2 Report): The Asian Development Bank (ADB) will provide a $260 million loan to the Government of Pakistan to improve the country’s power transmission network and help offtake of power from new and renewable energy power projects being financed and constructed under China Pakistan Economic Corridor and other offgrid private-power initiatives.

The funding announcement dovetails ADB announcement earlier this month that it is committed to financing Turkmenistan-Afghanstan-Pakistan (TAP) project. “The Asian Development Bank is committed to financing TAP. We have put aside some money to finance it,” said ADB country director for Afghanistan Samuel Tumiwa earlier this month.

As Pakistan moves forward to meet its energy demand by generating electricity through commissioning new power plants specially in Punjab and Sindh– two biggest concentration of the population and hub of large scale manufacturing, the countrywide transmission network needs to be augmented and enhanced side by side. Over 35,000 MW electricity is to be added to the national grid till 2030, energy experts say.

Pakistan is said to be on the verge of signing a Power Purchase Agreement (PPA) from utility-scale solar breaching grid parity, while the province of Sindh is due to start tariff-based competitive solar auctions this year. Several other fuel-based and wind and power projects are in the pipeline– all will be connected to the national grid of transmission lines which need upgradation.

The agreement is part of the Second Power Transmission Enhancement Investment Program aimed at improving coverage, reliability, transparency, and quality of the power transmission service in Pakistan by expanding the 220-kV transmission network in Sindh and Balochistan provinces and upgrading the supervisory control and data acquisition (SCADA) and revenue metering systems (RMS) in the country.

Upgrading the SCADA and RMS across the national grid will enable real time monitoring and control of the grid, preventing losses, reducing power outages, and increasing grid stability and capacity. It will also feed computerized metering data complying with the grid code into the system for settlement of the market operator, the Central Power Purchasing Agency (CPPA), to streamline revenue collection, billing and payment processes, as well as create the foundation for an energy trading platform.

Werner Liepach, ADB Director General for Central and West Asia, said: “A reliable and strong transmission network is essential to ensure uninterrupted supply of power for the industry and to propel economic growth– the World Bank projects that Pakistan’s GDP growth rate will be 5.8pc for 2018-19.

“ADB remains committed to work with the Government of Pakistan to develop a larger, stronger, smarter, and climate resilient power transmission network,” said Liepach.

ADB Pledges To Finance Turkmenistan-Afghanistan-Pakistan (TAP) Transmission Project

“The Asian Development Bank is committed to financing TAP. We have put aside some money to finance it,” said Asian Development Bank (ADB) country director for Afghanistan Samuel Tumiwa earlier this month.

Tumiwa said an inter-countries power transmission project will be able to transfer up to 4,000 megawatts of electricity from Turkmenistan into Afghanistan and Pakistan.

A framework agreement for the proposed Turkmenistan-Afghanistan-Pakistan (TAP) power interconnection project was signed in last week of February in the central Asian state that will pave the way for delivery of long-term power supply, supporting Afghanistan’s energy needs and enabling power trade and exchange among the three countries.

The project will include the construction of around 500 kilometers of 500 kilovolts transmission line between Turkmenistan, Afghanistan and Pakistan.

The power trade between the three countries will utilize existing power infrastructure as well as promote collaboration through new transmission investments in these countries.

ADB said as anchor development partner in the energy sectors of the three countries, would continue its facilitation role including assisting in the preparation of analytical studies for systems stability, reliability, and grid interconnection; studies for regulatory and legal, technical, commercial, and systems dispatch; as well as project assessment, including project feasibility, technical design, and preparation.

TAP will be phased into two concurrent stages. The first phase—to be completed by 2021—will use the existing infrastructure under the ADB-financed Turkmenistan-Uzbekistan-Tajikistan-Afghanistan-Pakistan power interconnection project which aims to export power from Turkmenistan to Afghanistan and Pakistan. The second phase—to be completed by 2022—will transfer power from Turkmenistan through the border of Serhetabad (in Turkmenistan) and Torghundy into Herat, Kandahar, and Spin Boldak in Afghanistan and export to Chaman and Quetta in Pakistan.

Eventually, TAP will serves as the frontend of CASA-1000 Transmission system announced for the region for which ADB and the World Bank and several other multilateral agencies have shown interest.

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