The government anticipates securing $2 billion in external financing for the power sector from international financial institutions during the next three years (2024-27). This funding will be sourced from the Asian Development Bank (ADB) under its Ordinary Capital Resources (OCR) and Concessional OCR Lending (COL), the World Bank through its Investment Project Financing (IPF), as well as loans from the Islamic Development Bank (IsDB), Korean EXIM Bank, and the Kuwait Fund for Arab Economic Development (KFAED), according to well-informed sources.
Key Projects and Funding Breakdown
- Power Distribution Strengthening Project-1
- Funding: $400 million from ADB OCR during 2024-25.
- Scope: Modernization of the transmission and distribution system, and implementation of revenue collection measures through the Asset Performance Management System (APMS) in HESCO, LESCO, MEPCO, and SEPCO.
- Status: Project scope finalized, PC-1 preparation ongoing in consultation with four DISCOs.
- Pattan Hydropower Project Readiness Financing (PRF)
- Funding: $14.8 million from ADB COL.
- Purpose: Updating feasibility study, detailed engineering design, preparation of tender documents, and PC-1 for constructing the Pattan Hydropower Project (400 MW).
- Status: CDWP has cleared the concept proposal, with project costs to be financed from WAPDA’s resources.
- Second Access to Clean Energy Investment Program (RBL)
- Funding: $200 million from ADB OCR in 2025-26.
- Goal: Improve energy access in remote and underserved areas in Sindh and Punjab using renewable energy resources, including renewable-based mini/micro grids.
- Status: Scope finalization ongoing with Punjab government.
- Second Power Transmission Strengthening Project
- Funding: $200 million from ADB OCR in 2026-27.
- Objective: Expand transmission capacity to evacuate renewable energy/power and improve the stability of the south-to-north transmission network through new infrastructure projects.
- Status: Project preparation stage, with potential phasing and co-financing arrangements due to large financing requirements.
- Floating Solar Project
- Funding: $340 million from World Bank IPF.
- Details: Generate 300 MW in the Tarbela-Ghazi Complex and 25 MW in the Tarbela reservoir.
- Status: Under preparation/approval process at WAPDA.
- National Transmission Modernization Project Phase-II
- Funding: $350-400 million from World Bank in 2026.
- Status: Inception stage, dependent on the timely implementation of the delayed first phase.
- Mohmand Dam Evacuation Project
- Funding: $140 million loan from IsDB.
- Additional Funding: $100 million from KFAED for the Mohmand Dam Hydropower Project.
- Status: First agreement ($25 million) expected to be signed during the current fiscal year.
- Swat Mingora Transmission Line
- Funding: $165 million loan from Korean EXIM Bank over three years.
- Purpose: Connect hydropower projects in Swat, constructed by Pakhtunkhwa Energy Development Organization (PEDO), to the national grid.
- Diamer Bhasha Dam Project
- Potential Funding: Saudi Fund for Development (SFD) financing is expected, though not yet materialized.
- Status: Project brief and PC-1 for the power generation component shared with SFD on August 17, 2023; response awaited.
These financing efforts underscore the government’s commitment to modernizing and expanding the power infrastructure, enhancing energy access, and integrating renewable energy solutions into the national grid.
