The power transmission system in Pakistan is currently unable to meet existing demand in some areas besides having voltage control issues around the clock and a high risk of instability under certain outage conditions, said Asian Development Bank in a report.
In a final report on "Power Transmission Enhancement Project", the ADB consultants observed that the first priority of the Multi Tranche Finance Facility (MFF) is to address these existing system constraints. In parallel with this the evacuation requirements of known IPPs will be addressed.
According to the report, the first tranche of funds drawn against the MFF will be used to fund the subprojects, and to address the implementation consultancy support requirement for the first and remaining tranches of the loan.
The implementation consultancy is not necessarily restricted to the technical requirements to carry out the transmission system sub-projects identified, but may also include capacity building and institutional strengthening aspects that are identified as being necessary to enable National Transmission and Despatch Company (NTDC) to carry out their ongoing commitments as a commercially viable national transmission operating organisation.
The Multi Tranche Finance Facility (MFF) is an ADB product that has recently been introduced as a means to address long term loan requirements that will inevitably be drawn down in stages. Under this facility ADB and the borrower reach a loan agreement for the first tranche and at the same time a financing agreement for future tranches of the MMF programme, with no commitment charges being levied. According to report, the purpose of the MFF currently being negotiated between Pakistan and ADB is to fund NTDC to develop the country's electricity transmission system such that it will be able to cope with the demands for power that already exist and the increases implied by the GDP targets of the government.
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