The World Bank has approved $375.9 million in financing for Pakistan’s first major grid modernisation project under a decade-long programme aimed at strengthening the country’s electricity transmission system, reducing outages and enabling greater integration of renewable energy into the national grid.
The financing, approved by the World Bank’s Board of Executive Directors, will support the Grid Stability Enhancement Project, the first phase of the 10-year Boosting Energy Security through Transmission in Pakistan (BEST-PAK) Multiphase Programmatic Approach (MPA).
According to the World Bank, Pakistan’s ageing transmission network has been struggling with grid instability and bottlenecks that have constrained reliable electricity supply, increased system costs and prevented the full utilisation of clean energy resources, particularly wind power.
The project will install advanced grid stabilisation equipment, including Static Synchronous Compensators (STATCOMs) at three major 500-kilovolt substations, alongside fixed reactors and capacitor banks across 26 grid substations to improve voltage stability and power flow across the national transmission network.
The investment is expected to enable the evacuation of 640 megawatts of currently curtailed wind power, allowing the full utilisation of 1,840MW of installed wind generation capacity in southern Pakistan by transmitting electricity to major demand centres. It will also facilitate the integration of about 491MW of planned private sector renewable energy projects.
World Bank Country Director for Pakistan Bolormaa Amgaabazar said Pakistan’s energy challenges were closely linked with the country’s broader economic stability, adding that investment in advanced transmission technologies would help lower electricity costs, improve grid reliability and create a stronger foundation for households, industries and businesses.
The World Bank said the project would support Pakistan’s target of increasing the share of renewable energy in the national electricity mix to 60 percent by 2030 under its Nationally Determined Contributions (NDCs) to the Paris Agreement.
Over its 25-year operational life, the project is expected to prevent around 20.8 million tonnes of carbon dioxide emissions, including an estimated 832,500 tonnes annually.
Lead Energy Specialist for the World Bank’s BEST-PAK programme, Waleed Saleh Alsuraih, said a modern and reliable transmission network was essential for Pakistan’s energy future, adding that the programme would create conditions for large-scale clean energy deployment, improved energy security and greater private sector investment through targeted infrastructure upgrades and institutional reforms.
The project will also support the government’s transmission sector restructuring agenda by facilitating reforms aimed at transforming the National Transmission and Dispatch Company (NTDC) into specialised successor entities to improve governance, operational efficiency, accountability and the long-term financial sustainability of the power sector.
The World Bank noted that climate resilience has been incorporated into the project’s design, with all new installations required to meet specifications capable of withstanding floods and extreme temperatures of up to 55 degrees Celsius to ensure uninterrupted operations during monsoon seasons and heatwaves.
