World Bank classifies financing for Grid Stability Enhancement Project

ISLAMABAD: The World Bank has classified the entire USD 375.9 million financing for Pakistan’s Grid Stability Enhancement Project as climate finance, with 95 percent earmarked for climate change mitigation and the remaining five percent for adaptation measures.

According to the World Bank’s IBRD/IDA Climate Finance Assessment Sheet for fiscal year 2027, the project, titled BEST-PAK MPA Programme Phase 1: Grid Stability Enhancement Project, has been assigned project ID P504536 and falls under the Energy and Extractives sector.

The assessment showed that the total climate finance component stands at USD 375.9 million, representing 100 percent of the project’s IBRD/IDA financing.

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Of the total amount, USD 357.11 million, or 95 percent, has been classified as climate mitigation finance, while USD 18.8 million, or five percent, has been allocated to climate adaptation.

The project’s largest component, involving power electronics-based Reactive Power Compensation Devices (STATCOMs), carries financing of USD 369.9 million. The World Bank has classified the entire amount as climate finance, including USD 351.41 million for mitigation and USD 18.5 million for adaptation.

The remaining USD 6 million has been allocated for technical assistance and project implementation support. Of this amount, USD 5.7 million has been classified as mitigation finance and USD 0.3 million as adaptation finance.

The assessment also identifies USD 37.59 million as dual-benefit financing, covering measures contributing to both climate adaptation and mitigation. To avoid double counting, the World Bank has deducted 50 percent of this amount from each category when calculating the final climate finance breakdown.

The assessment is based on the Joint Multilateral Development Banks’ methodologies for tracking climate adaptation and mitigation finance.

Copyright Business Recorder, 2026