The Asian Development Bank (ADB) is supporting a programme to remove transmission bottlenecks to power delivery in Pakistan through a multitranche financing facility amounting to $800 million, the institution said in a statement. The funds will rehabilitate and expand parts of Pakistan transmission system to meet present and anticipated future demand and ensure the system s continued operation and maintenance. Excess load on transmission lines at substations is one of the critical factors causing transmission and distribution losses in Pakistan s power system. At the end of 2005-06, more than three quarters of the country s 500 KV and 69% of its 220 KV transformers were overloaded. Pakistan s present transmission system faces considerable risks and costly servicing because it is operating at or above rating limits, says Rune Stroem, an ADB Principal Energy Specialist. The system as it stands cannot keep up with present demand and risks major delivery constraints. Providing more reliable power is essential for growth and expansion of Pakistan s economy and, in turn, economic and social development. Recognizing these issues, the country s sole transmission company, the National Transmission and Dispatch Company (NTDC), in coordination with the Ministry of Water and Power, has prepared a Transmission Sector Road Map for 2007-2016. Through an investment plan estimated at $3.9 billion, this will address the system s current shortcomings. ADB s Power Transmission Enhancement Investment Programme will meet about 20% of this cost over the 10-year period. Using the multi-tranche financing facility, the government can make period financing requests that will be converted to separate loans. The first request amounts to $226 million from ADB s ordinary capital resources (OCR) and $10 million from its soft loan facility, the Asian Development Fund (ADF). The OCR money will fund 19 subprojects to provide 26 transformers, two new substations, 50 kilometers of transmission line and one static var compensator. The ADF financing will support NTDC s project, planning, design, implementation, operations, and monitoring for the duration of the entire programme. All financing from OCR resources will have a 20-year term, including a grace period of three years. Interest is to be determined in accordance with ADB s LIBOR-based lending facility. The ADF loan will have a 32-year term, including a grace period of eight years. Interest is charged at 1% per annum during the grace period and 1.5% per annum subsequently. The executing agency for the programme is NTDC.
