ISLAMABAD: The World Bank (WB), Asian Development Bank (ADB) and Islamic Development Bank (IsDB) have reportedly conveyed willingness to finance three projects of National Transmission and Despatch Company (NTDC) and advised seeking private participation for Ghazi Brotha to Faisalabad West Transmission Line, sources in Economic Affairs Division (EAD) told Business Recorder.
These commitments were shared at a meeting presided over by Secretary Economic Affairs Division, Dr Kazim Niaz and attended by senior officials of development partners and Power Division/ NTDC.
Secretary EAD noted that during an earlier meeting held with the Minister for Economic Affairs, Ahad Khan Cheema, the prospects of providing financing for NTDC projects were discussed. The projects related to transmission lines were prioritised for financing by international development partners and equity financing through the Special Investment Facilitation Council (SIFC).
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Taking part in discussion on NTDC’s projects, Simon Stolp, Practice Manager Energy WB stated that they were ready to consider co-financing for the Matiari-Moro-Rahim Yar Khan Transmission line along with ADB & IsDB. He further stated that WB internally prioritised the Reactive Compensation Power Devices Project but this did not preclude them from providing financing for transmission line projects.
He further noted that long-term priorities of WB were focused on strengthening NTDC in acquiring assets and increasing private participation in the national transmission network.
The Secretary, Power Division, Dr Fakhre Alam Irfan, stated that a Transmission System Expansion Plan (TSEP) had been submitted by NTDC to Nepra for approval. He noted that total outlay of $ 8.4 billion was required which included $ 3.4 billion for ongoing projects and $ 5.0 billion for new power sector projects.
The Secretary EAD added that pipeline allocation of international development partners had been utilized for the current year and this meeting would help prioritize power sector projects, as per the request of Power Division/ NTDC, for allocation, against future pipeline projects.
Ehtasham Khattak, Energy Sector Specialist ADB, noted that readiness of projects was the most important factor for ADB for financing.
He further added that ADB would prefer an Engineering Procurement and Construction (EPC) approach for NTDC projects since this approach had worked better in successfully executing projects, whereas non-EPC approach had resulted in delays (especially where NTDC/ Government was financing the civil works component).
He further stated that ADB would specifically look at projects where procurement was on-going or at an advanced stage because this can represent the Governmental commitment for timely completion of the project.
Ossama Trigui, a representative of IsDB, added that three projects, under discussion, were already being reviewed by the Bank for potential financing.
He informed further that IsDB was ready to provide co-financing for the projects based on willingness of ADB and WB to provide financing. Moreover, he stated that IsDB would prioritise projects where other development partners had already committed financing.
Muhammad Waseem Younas (DMD SO) NTDC stated that installation of Reactive Compensation Devices was necessary to upgrade Matiari-Moro-Rahim Yar Khan transmission line. Moreover, for this transmission line project, M/s NESPAK had been hired to carry out techno-financial feasibility studies which would be completed by end of current month.
After detailed discussions, following decisions were made:
(i) WB and ADB each gave an initial commitment of $500 million for three projects, whereas, IsDB gave an initial commitment of $200-320 million for the three projects;
(ii) for Moro to Matiari to Rahim Yar Khan transmission lines project, WB and ISDB will provide co-financing with ADB being the anchor financier;
(iii) for Reactive Compensation Devices Project, WB would serve as anchor financier and ADB & IsDB would provide co-financing;
(iv) for Ghazi Brotha to Faisalabad West Transmission Line, EAD, Power Division & NTDC shall hold internal discussions on leveraging the potential of private sector participation through PPP mode alongside seeking traditional international development partners’ support to meet total financing need of the project.
Copyright Business Recorder, 2024
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