ADB provides $200mn loan to Pakistan for energy sector

Islamabad: Pakistan and the Asian Development Bank (ADB) have signed an agreement to provide $200 million in assistance to improve the country’s dilapidated power distribution system through network improvements.

The ADB’s Board of Directors on December 10 initially approved a loan to support three power distribution companies in Lahore, Multan, and Sukkur – LESCO, MEPCO, and SEPCO – through modern metering infrastructure, data management systems, and an Asset Performance Management System (APMS).

The loan agreement was signed by Secretary Economic Affairs Division Dr Kazim Niaz and the bank’s Country Director Asad Aleem on behalf of the parties.

Speaking on the occasion, Dr Kazim Niaz stressed the timely and effective utilization of the Asian Development Bank loan and urged all concerned institutions, especially the Power Distribution Companies (DISCOs), to ensure the timely completion of the project to modernize the power distribution infrastructure in the country and enhance the capacity of LESCO, MEPCO, and SEPCO to provide reliable power.

The $200 million loan for the Power Distribution Strengthening Project aims to upgrade and modernize the distribution systems to meet the country’s rapidly growing power demand.

The project will focus on reducing significant energy losses during transmission and increasing the resilience of the infrastructure against climate change and disaster-related risks.

In the initial phase, the project will provide support to three major distribution companies, paving the way for more efficient and sustainable energy delivery in these regions.

The project will fund the installation of at least 332,000 modern metering infrastructure and at least 15,800 online transformer performance monitoring systems, along with data management and communication systems.

In addition, the voltage of four grid stations in SEPCO will also be upgraded from 66 kV to 132 kV, a significant increase that will reduce transmission system losses and meet the growing electricity demand.

At least 25 grid stations in LESCO will be constructed and modernized with the provision of necessary equipment. The high-loss ‘11 kV’ feeder lines will be replaced with aerial bundled conductor cables and the feeder line layout will be improved.

These upgrades are expected to reduce losses, increase revenue collection, and provide distribution companies with real-time data on power consumption and grid performance.

In the event of severe weather conditions, they can help identify and isolate faults quickly, reducing recovery time and reducing outages.