Digitisation of Power Distribution Network Project: Germany likely to grant €2.5m additional funding

ISLAMABAD: The German government is likely to allocate additional funding of Euro 2.5 million under the “Decarbonisation and Digitisation of Power Distribution Network Project” in Pakistan, sources told Business Recorder.

Sharing the details, sources said that the ongoing GIZ-supported project “Decarbonisation and Digitisation of Power Distribution Network in Pakistan, with a total volume of Euro 7 million, is being implemented in close collaboration with the Ministry of Energy (Power Division) and other key power sector entities.

The German Development Cooperation (GIZ), Pakistan, has apprised the Power Division that the project focuses on four core outputs designed to support Pakistan’s energy transition through improved grid efficiency, enhanced digitalisation, and capacity building.

Power generation plans shared with German development agency

“Recognising the progress and relevance of the ongoing initiative, an additional component worth Euro 2.5 million is likely to be approved by the German Government as the 5th output of the project,” the sources said adding that the new component will focus on the development and implementation of a pilot Battery Energy Storage System (BESS), including the formulation of a business model, and the capacity building of relevant power sector officials to strengthen technical and regulatory readiness for energy storage integration in Pakistan’s distribution network.

To initiate this activity, a scoping mission will be conducted, comprising RuedigerSpielkamp (Expert on Renewable Energy Grid Integration, GIZ Headquarters, Germany), Jens Brinkmann (Head of the DEDI Project, GIZ Pakistan), and other GIZ technical experts. The mission intends to engage with key public and private sector stakeholders to contribute to the pilot concept and implementation framework.

As the Ministry of Energy (Power Division) serves as a partner for theproject, GIZ has sought time for a meeting with the Secretary of the Power Division, Dr. FakhreAlamIrfan, and his team to discuss the concept and collect their valuable input for the design of the Battery Energy Storage System (BESS) component of the project.

Following the meeting, the mission will also engage with power Distribution Companies (DISCOs) and other stakeholders to finalise the BESS pilot concept to be implemented under the project.

GIZ’s energy cooperation in Pakistan focuses on modernising the power sector, integrating renewable energy, and improving energy efficiency through initiatives like this project, a partnership with Pakistan’s Ministry of Energy.

Key activities included developing a regulatory framework for battery storage, modernising the grid with digital technologies, supporting climate-resilient infrastructure, and promoting energy-efficient construction through innovation.

Energy demand in Pakistan has increased significantly due to rapid urbanisation. The building sector alone accounts for over 60 percent of the country’s electricity consumption during the summer. This growing demand has significant economic, environmental, and climatic implications. To address this challenge, the GIZ Pakistan, on behalf of the German development cooperation, is supporting Pakistan’s National Energy Efficiency and Conservation Authority (NEECA) for a systemic transformation in the building sector.

To promote energy efficiency through digital innovation, applied research, capacity building, and policy support, GIZ supported the University of Engineering and Technology (UET) Peshawar in establishing the Buildings Energy Research Centre (BERC). With energy efficiency at its core, this research hub brings together researchers, practitioners, and students to re-imagine how buildings are designed, constructed, evaluated, and managed.

Copyright Business Recorder, 2025