Pakistan seeks ADB financing amid power sector reforms

Pakistan has sought the Asian Development Bank’s (ADB) financing support as it pushes ahead with power sector reforms aimed at stabilising the electricity grid, addressing the debt situation, and rolling out smart metering through public-private partnerships.

The development came during a high-level meeting between Federal Minister for Power, Sardar Awais Ahmed Khan Leghari, with a delegation of the ADB led by Leah Gutierrez, Director General, Central and West Asia Department.

According to an official statement, Leghari welcomed the ADB delegation and thanked them for their visit. Leah Gutierrez shared that this was her first visit to Pakistan in her current role and appreciated the opportunity to engage with the Power Division.

The minister briefed the delegation on the key challenges of the power sector. He highlighted constraints in financing, issues related to rupee cover, and high upfront costs.

He added that the government is engaging local investors through the Pakistan Business Council (PBC) to attract private investment in the power transmission sector and to improve market visibility.

Sharing ongoing reforms, Leghari highlighted progress on IGCEP-aligned transmission projects. He stated that excess power capacity, which was not required in the future, has been removed.

He reaffirmed that the government will not procure additional power and is moving towards a competitive electricity market.

The power minister noted that Pakistan has already transitioned around 20GW to clean energy.

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However, despite this significant transition, no dedicated financing was provided for the clean energy shift, nor was funding made available to ensure grid stability, read the statement.

He said that the transition to renewable energy continued despite these limitations, but stressed that serious and coordinated efforts, supported by adequate financing, are now needed to keep the grid stable.

The minister also shared details of the Energy Surplus Package introduced to increase electricity demand and encourage higher power offtake by the private sector.

He requested ADB’s support on the financing side, particularly in addressing debt repayment challenges and in building confidence among private investors.

He informed the delegation that a feasibility report aimed at private investors will be presented soon.

During the meeting, he also shared that the government is planning the rollout of smart meters through the private sector participation under the PPP model, with a focus on technology integration and improved efficiency.

Meanwhile, Gutierrez expressed ADB’s interest in supporting smart metering initiatives and highlighted ADB’s expertise in public-private partnerships and technology integration.

She was also keen on supporting the Integrated Energy Plan and serving as a transitional advisor on PPP frameworks.