World Bank approves $376mn to strengthen Pakistan’s electricity grid

The World Bank’s Board of Executive Directors approved $375.9 million in financing for Pakistan’s Grid Stability Enhancement Project, to strengthen the country’s national power transmission network under the Boosting Energy Security through Transmission in Pakistan (BEST-PAK) Multiphase Programmatic Approach (MPA).

The project is the first phase of a 10-year program to help Pakistan modernise its electricity transmission network, reduce power outages, and bring more clean energy to homes, businesses, and industries, read a statement.

 “Pakistan’s energy challenges are deeply interconnected with its broader economic stability,” said Bolormaa Amgaabazar, World Bank Country Director for Pakistan.

“By investing in advanced technologies for more resilient transmission infrastructure, this project will contribute to reducing electricity costs, bring more renewable energy onto the grid, and lay the groundwork for a power sector that works better for households, businesses and industries, as well as overall Pakistan’s economy.”

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Pakistan’s electricity network has long struggled with grid instability and transmission bottlenecks that limit the delivery of reliable power and leave clean energy generation underutilised.

These constraints affect millions of Pakistanis every day through frequent outages, higher electricity costs, and lost economic opportunities.

The project will install advanced equipment to stabilise the transmission grid and improve the flow of electricity at key substations.

This includes Static Synchronous Compensators, or STATCOMs, at three major 500 kV substations, as well as fixed reactors and capacitor banks across 26 grid substations. These upgrades will help bring 640MW of currently curtailed wind energy onto the grid, enabling the full use of 1,840MW of wind capacity in southern Pakistan by moving power to major demand centres.

They will also support the integration of approximately 491MW of planned private sector-led renewable energy projects.

“Together, these improvements will help Pakistan move toward its national commitment of achieving 60% renewable energy in its electricity mix by 2030, in line with the country’s Nationally Determined Contribution under the Paris Agreement,” read the statement.

Over its lifetime, the project is expected to avoid approximately 832,500 tons of CO₂ emissions each year, or more than 20.8 million tons cumulatively over 25 years, it added.

“A reliable and modern transmission grid is essential for Pakistan’s energy future,“ said Waleed Saleh Alsuraih, Lead Energy Specialist for the World Bank’s BEST‑PAK program in Pakistan.

“As the first phase of the BEST-PAK program, it unlocks a pathway to large-scale clean energy deployment, stronger energy security, and a modern, commercially oriented transmission sector through targeted infrastructure investments and institutional reforms, creating the conditions for future private capital participation.”

The project also advances the government’s ongoing transmission-sector reform agenda, centred on the restructuring of National Transmission & Dispatch Company (NTDC) into specialised successor entities.

The project supports faster implementation of reforms designed to strengthen governance, accountability, operational performance, and the long-term sustainability of the power sector.

The World Bank also highlighted that Pakistan is among the countries most exposed to climate-related risks, including river and urban flooding and extreme heat events.

“The project’s design accounts for these realities by requiring all new installations to meet climate-resilient specifications, including elevated platforms above ground to mitigate flood exposure and equipment designed to operate in temperatures of up to 55°C.

“These measures will help ensure reliable performance during monsoon seasons and heatwaves,” WB said.