The World Bank has approved $256.85 million credit and loan for Pakistan, designed to improve reliability and efficiency of power supply through a comprehensive project. The Electricity Distribution and Transmission Improvement Project aims to improve distribution and transmission networks to meet increasing electricity demand and to strengthen institutional capacity of electricity distribution companies.
The project components include: (a) physical strengthening of distribution networks operated by distribution companies located in Hyderabad, Islamabad, Lahore and Multan; (b) removing bottlenecks in the transmission grid operated by the national transmission company. Through the construction of a sub-station at Kassowal and associated lines; (c) technical assistance for capacity building, specialised studies, energy efficiency, and sector reform activities; and (d) a pilot energy efficiency programme, involving installation of energy saving equipment at the customer level.
The US $173.6 million loan from the International Bank for Reconstruction and Development (IBRD) has 30 years maturity, including a five-year grace period. The US $83.1 million credit is provided by the International Development Association (IDA), the World Bank trade's concessionary lending arm and has 35 years to maturity and a 10-year grace period.
Pakistan is facing electricity shortages. While electricity sales have risen by 40 percent in the past five years, generation capacity remained practically stagnant. It is estimated that the system lacks about 2000 MW to cover peak demand with acceptable reliability.
"Pakistan has added about one million new, mainly household, electricity connections each year, about a quarter of its population still has no access to electricity, and the quality of service to those who are connected has been deteriorating sharply," said Yusupha Crookes, World Bank Country Director for Pakistan.
"The project supports investments in the distribution and transmission networks, which are essential to meet the growth in electricity demand more efficiently, and with improved quality of service," said Rashid Aziz, World Bank Senior Energy Specialist and project team leader.
"The project also aims to help the companies reduce technical and commercial losses and help strengthen various corporate functions and governance. It also includes a component to support energy efficiency and conservation activities to urgently respond to the critical shortages that the country is facing right now."