The Asian Development Bank (ADB) has approved a $200 million loan aimed at upgrading and modernizing Pakistan’s power distribution infrastructure and enhancing the reliability of electricity supply.
According to an ADB press release issued on Wednesday, the Power Distribution Strengthening Project will focus on upgrading distribution systems to meet the increasing electricity demand in the country.
Key objectives include reducing significant energy losses during transmission and improving the resilience of infrastructure against climate change and disaster-related risks. Initially, the project will benefit three major distribution companies: Lahore Electric Supply Company (LESCO), Multan Electric Power Company (MEPCO), and Sukkur Electric Power Company (SEPCO), promoting more efficient and sustainable energy delivery in these areas.
“Reliable grid-connected electricity improves the quality of life,” said Yevgeniy Zhukov, ADB’s Director General for Central and West Asia. He emphasized that the project’s loss reduction and revenue protection measures would help mitigate financial losses in the power sector, easing economic pressures on the country.
The initiative will fund the installation of over 332,000 advanced metering infrastructures, along with data management and communication systems, and 15,800 online transformer performance monitoring systems across LESCO, MEPCO, and SEPCO.
Additionally, four grid stations in SEPCO will see voltage upgrades from 66 kilovolt (kV) to 132 kV to reduce transmission losses and address rising electricity demand. In LESCO, at least 25 grid stations will be constructed and modernized with essential equipment. inp
Social Protection Programme
The Asian Development Bank (ADB) has approved $330 million in additional financing to strengthen Pakistan’s federally administered social protection programs and services.
The result-based loan for the ongoing Integrated Social Protection Development Program (ISPDP) will help expand the grassroots-level social protection to alleviate poverty among poor women and their families, according to ADB press release received here Wednesday.
The program will enhance the institutional capacity of the Benazir Income Support Programme (BISP), Pakistan’s flagship social protection agency, to transition to adaptive and climate-resilient social protection.
This will include enhancing access to education pathways for children and youth from poor families and increasing access to health services and nutrition supplies for beneficiaries who are in disaster-prone areas.
“This program strengthens Pakistan’s effort to improve human capital development and reduce intergenerational poverty, especially for women who are disproportionately affected during difficult economic situations,” said ADB Director General for Central and West Asia Yevgeniy Zhukov.
Zhukov said ADB’s additional financing would help boost the government’s ability to reach more of the poorest and most vulnerable in the country.
Approved in December 2021, the ISPDP includes a $600 million loan from ADB’s ordinary capital resources, a $3 million grant from the Asian Development Fund, and a $24.48 million cofinancing grant from the Education Above All Foundation. The $627 million program, in implementation since 2022, has achieved significant results.
“The program is performing well. It has helped increase access to primary and secondary education for children and adolescents from poor families as well as improved access to health services and nutrition supplies for women and adolescent girls,” said ADB Country Director for Pakistan Emma Fan.
“Steady progress has been also made to improve the financial management, procurement practices, internal controls, and information management system for BISP, which is responsible for implementing cash transfer programs,” Emma added.
Since 1966, ADB has committed over $52 billion in public and private sector loans, grants, and other forms of financing to promote inclusive economic growth in Pakistan, a founding member of the bank, and improve the country’s infrastructure, energy and food security, transport networks, and social services.
Reaffirm cooperation
Minister for Economic Affairs Ahad Cheema and Asian Development Bank (ADB) Country Director Xiaoqin (Emma) Fan on Wednesday reaffirmed their commitment to mutual cooperation between Pakistan and ADB.
During a meeting, the discussion highlighted ADB’s crucial role in supporting Pakistan’s climate resilience and development priorities, including the successful USD 500 million Climate and Disaster Resilience Enhancement Program (CDREP), said a news release.
Highlighting climate change as an existential challenge, the minister emphasized ADB’s pivotal role as a “climate bank” and stressed the importance of ensuring climate finance remains additional to existing development envelopes.
The minister expressed appreciation for ADB’s role as a reliable development partner, aligning its priorities with the government.
He also commended ADB’s contributions to tax reforms and the power sector.
ADB Country Director expressed gratitude for the government of Pakistan’s support and reaffirmed ADB’s commitment to collaborating on shared priorities. She commended Pakistan’s proactive engagement and reiterated ADB’s role as a key partner in addressing climate challenges.
The meeting discussed mutual interests, including climate change, pipeline projects, strategic programming for the upcoming portfolio, and public-private partnerships.
ADB is considering a new Country Partnership Strategy, extending it from 5 to 10 years, and holding consultations with key stakeholders.
ADB will continue to work closely with the Ministry of Economic Affairs and other stakeholders to ensure its support aligns with Pakistan’s development priorities, it added.
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