The Asian Development Bank (ADB) has approved a loan of 245 million dollars (Tranche 3) for the eight distribution companies to improve power distribution system in Pakistan. According to a statement of the Bank issued here on Monday, the investment is part of the ongoing 810 million dollars Power Distribution Enhancement Investment Programme agreed in 2008.
The multi-tranche financing facility (MFF) targets investment in priority areas to reduce power losses and increase the reliability of the power distribution system. Through this facility, ADB has already provided financial assistance for upgradation work at 250 grid stations (66 kV and 132 kV) across Pakistan, out of which work relating to 125 grid stations have been completed.
The Tranche 3 approved on December 14, 2012 will increase distribution capacity of 106 grid stations including construction of 14 new grid stations. "Energy sector in Pakistan is suffering due to shortages in generation and system bottlenecks at distribution and transmission level. ADB has made available four MFFs amounting to 2.9 billion dollars to address these system constraints and will continue to assist Pakistan in the energy sector," said Werner E Liepach, Country Director of ADB in Pakistan.
The project will help the Discos improve reliability and quality of power supply to customers. The outcome will be removal of power system bottlenecks through distribution system rehabilitation, augmentation, and expansion. "Energy conservation and efficiency is the fastest and cheapest way of increasing electricity supply. This project will not only reduce electricity lost during delivery to the customers but will also improve the quality of service," said Rune Stroem, Director for Energy Division in ADB's Central and West Asia Department.
He encouraged the government to continue with more focused reforms in the sector. Without effective reforms, the investments in the sector will lose its real impact. The project will add 1,881 megavolt-amperes (MVA) of transformer capacity and will improve the transmission system by adding 791 kilometres of new transmission lines and upgrading 399 km of the existing 66 -kilovolt (kV) and 132-kV transmission lines.
"The investments are divided among all eight publicly owned distribution companies totalling 106 subprojects. The first tranche is already completed and has shown satisfactory results. The second tranche is also on track. The newly approved tranche is expected to further improve the distribution system," says Adnan Tareen, Senior Project Officer at ADB Pakistan Resident Mission. "However, in order to further improve performance, the government should prioritise monitoring and accountability of the system," he added.
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