Power distribution network: ADB proposes USD130m loan-financed project

ISLAMABAD: The Asian Development Bank (ADB) has proposed a USD 130 million loan-financed project for strengthening Pakistan’s power distribution network through the deployment of advanced digital technologies across five electricity distribution companies (Discos).

According to project details, the proposed Second Power Distribution Strengthening Project (PDSP-II) will support the rollout of Asset Performance Management Systems (APMS), Advanced Metering Infrastructure (AMI), and associated data management and analytics platforms to improve operational efficiency, reliability, and climate resilience of power distribution services.

The project is currently at the proposed stage, with fact-finding missions scheduled from June 1 to June 30, 2026, following concept clearance granted on March 9, 2026.

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Under the initiative, the ADB plans to extend interventions introduced under the first Power Distribution Strengthening Project to the Peshawar Electric Supply Company (PESCO), Hazara Electric Supply Company (HAZECO), Quetta Electric Supply Company (QESCO), while expanding coverage in Lahore Electric Supply Company (LESCO) and Sukkur Electric Power Company (SEPCO).

The ADB noted that Pakistan’s power sector continues to face significant operational and financial challenges, including high technical and commercial losses, weak revenue recovery, poor asset utilization, and limited digital visibility across distribution networks. These weaknesses contribute to frequent power outages, unstable supply, and declining service quality for consumers.

The lender observed that distribution companies remain constrained by inadequate deployment of modern technologies, including real-time monitoring systems and predictive analytics needed to manage overloaded transformers, high-loss feeders, and network reliability issues.

“The project addresses these binding constraints by scaling up APMS and AMI to improve network visibility, enable predictive maintenance, reduce losses, and strengthen the operational accountability of Discos,” the project document stated.

According to ADB, the initiative is expected to improve outage response times, enhance billing integrity, support a reduction in circular debt, and strengthen the climate resilience of electricity distribution infrastructure, particularly in areas vulnerable to extreme weather events.

The project’s intended impact is to support economic development in targeted regions through an affordable, secure, and sustainable energy supply. Its primary outcome will be improved operational efficiency, reliability, and climate resilience of participating Discos. Upon approval, the project is expected to accelerate the digital transformation of Pakistan’s power distribution sector and contribute to broader government efforts aimed at improving energy sector governance, reducing losses, and enhancing service delivery to consumers nationwide.

Copyright Business Recorder, 2026