Asian Development Bank approves $330mn loans for Pakistan’s power sector

The Asian Development Bank (ADB) has approved loans totalling $330 million to Pakistan for the Second Power Transmission Strengthening Project, one of the government’s top priority investments to expand the national transmission network and enable the evacuation of low-cost renewable and hydropower to major load centres.

As per the statement, released on Thursday, the project will construct a new 500-kilovolt, approximately 290-kilometre transmission line and upgrade critical grid infrastructure feeding Islamabad and Faisalabad.

“These investments will address long-standing constraints in Pakistan’s north–south power corridor, enabling the transfer of up to 3,200 megawatts of clean energy from hydropower plants in the north of the country. This will help reduce reliance on imported fuels, improve energy security, and support Pakistan’s transition to a more affordable and sustainable energy mix,” the multilateral lender said.

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The initiative supports Pakistan’s broader power sector reforms and contributes to state-owned enterprise (SOE) reforms by solidifying institutional, financial, operational, and governance improvements of the National Grid Company of Pakistan Limited (NGC)—formerly National Transmission Dispatch Company (NTDC)—on its pathway to a modern grid operator.

The NGC will serve as the executing agency for the project.

“ADB’s financing package comprises a $285 million loan from its ordinary capital resources and a $45 million concessional loan,” read the statement.

This financing will help NGC expand and modernise transmission assets, strengthen institutional capacity, improve financial management, and advance public outreach and gender equity initiatives.

“This project represents ADB’s strong partnership with Pakistan and our shared commitment to accelerate clean energy transition and integration, and to achieve a resilient and sustainable energy sector,” said ADB Country Director for Pakistan Emma Fan.

“By expanding transmission capacity and enabling the delivery of low-cost hydropower, the project aims to improve access to clean energy in the power mix, reduce system costs, and support Pakistan’s long-term and sustainable economic development.”

The Second Power Transmission Strengthening Project aligns with Pakistan’s National Power Policy (2021), Vision 2025, and Pakistan’s Nationally Determined Contributions (2021), which emphasise energy security, climate resilience, affordable clean power, and sustainable development.

The new infrastructure will also lower technical losses, enhance grid reliability, and support the financial sustainability of the energy sector.