World Bank weighs to invest in power distribution network
ISLAMABAD: The World Bank is assessing a proposal to invest in high-priority transmission infrastructure to revamp selected segments of the country's electricity distribution network. The proposed $493 million project aims to increase the reliability and efficiency of the national transmission system.
Recent efforts have concentrated on increasing power generation capacity in the country, but ageing and increasingly unreliable transmission and distribution systems also impose severe constraints.
Anecdotal evidence suggests that the transmission system has the capacity to dispatch only 15,000MW safely. There have been several instances of system breakdown and they appear to be increasing in frequency and severity.
According to sources at the World Bank, the International Bank for Reconstruction and Development will provide a loan of $425m for the project, while the remaining $68m will be provided by the National Transmission and Despatch Company (NTDC) as counterpart funds.
The project entails upgrading, expanding and rehabilitating selected 500kV and 220kV substations and transmission lines. It will also be viable at 765kV, if the NTDC decides to start operating at the higher voltage.
Sub-projects will be selected on the basis of planning carried out by the NTDC, which will identify the areas where improvements are required first.
The World Bank has embarked upon a "Transformational Power Initiative" as part of the Country Partnership Strategy (for 2015-2019). The initiative aims to support new investments and reforms in the power sector and mobilise over $10 billion over the next five years to support system expansion through the public and private sectors.
The International Finance Corporation (IFC) has made investments in medium to large hydropower projects and wind generation and LNG import schemes. Currently, the WB and IFC are working on the Central Asia-South Asia Regional Electricity Transmission and Trade Project (CASA-1000) to bring Central Asian power to Pakistan. The proposed project will complement the Dasu hydropower project, Tarbela extensions 4 and 5 and the CASA-1000. Although it is not part of the country partnership strategy, additional transmission infrastructure is needed to distribute the electricity produced from current or planned WBfinanced investment operations.
A WB report says massive, well-targeted and efficiently executed investment is needed throughout the electricity value chain. To bridge the gap between supply and demand, the government has focused on improving electricity supply through development of low-cost generation, particularly hydropower, projects in the north and plants based on gas and coal in the centre and south of the country.
Investment in generation will not, however, have the intended benefits without adequate and timely up-gradation of transmission and distribution systems.