ISLAMABAD: The World Bank has approved $375.9 million in financing for Pakistan’s Grid Stability Enhancement Project. The organisation said that the programme’s goal is to strengthen the country’s power transmission network, improve grid reliability and facilitate the integration of renewable energy.
The financing, approved by the World Bank’s Board of Executive Directors, forms the first phase of the 10-year Boosting Energy Security through Transmission in Pakistan (BEST-PAK) programme, which seeks to modernise the electricity transmission system, reduce power outages and improve energy supply to households, businesses and industry.
“Pakistan’s energy challenges are deeply interconnected with its broader economic stability,” said Bolormaa Amgaabazar, the World Bank’s country director for Pakistan. She said the investment in advanced transmission technologies will help lower electricity costs, increase the share of renewable energy in the grid and support broader economic growth.
Pakistan’s transmission network has long faced grid instability and bottlenecks that limit the efficient delivery of electricity and constrain the utilisation of clean energy. The World Bank said these shortcomings contribute to power outages, higher electricity costs and lost economic opportunities.
Under the project, advanced grid-stabilisation equipment will be installed at key substations, including Static Synchronous Compensators (STATCOMs) at three major 500-kilovolt substations, along with fixed reactors and capacitor banks at 26 substations across the country.
The upgrades are expected to enable the transmission of 640 megawatts of wind power currently being curtailed, allowing the full utilisation of 1,840MW of wind generation capacity in southern Pakistan. The project will also facilitate the integration of around 491MW of planned private-sector renewable energy projects.
According to the World Bank, these improvements will support Pakistan’s target of increasing the share of renewable energy in the national electricity mix to 60 per cent by 2030, in line with its commitments under the Paris Agreement. Over a 25-year period, the project is expected to avoid more than 20.8 million tonnes of carbon dioxide emissions, equivalent to about 832,500 tonnes annually.
“A reliable and modern transmission grid is essential for Pakistan’s energy future,” said Waleed Saleh Alsuraih, lead energy specialist for the World Bank’s BEST-PAK programme. He said the initiative would support large-scale deployment of clean energy, strengthen energy security and advance reforms aimed at creating a more commercially oriented transmission sector.
The project also supports the government’s transmission-sector reform agenda, including the restructuring of National Transmission and Dispatch Company (NTDC) into specialised successor entities to improve governance, accountability, operational performance and long-term sustainability.
The World Bank said Pakistan could achieve significant economic and environmental benefits by accelerating the transition from thermal power generation to renewable sources, including hydropower and solar energy. The lender noted that further investments in transmission infrastructure, energy efficiency and regulatory reforms will be required to attract private-sector participation and reduce overall generation costs.
The project has also been designed to withstand climate-related risks, the bank said. All new installations will be built to climate-resilient standards, including elevated platforms to mitigate flood risks and equipment capable of operating in temperatures of up to 55 degrees C, helping ensure reliable performance during heatwaves and monsoon seasons.
