USD425m NTM-I project: World Bank flags delays in implementation
ISLAMABAD: The World Bank has flagged delays in the implementation of Pakistan’s USD 425 million National Transmission Modernisation-I Project, with only 60.12 percent of the loan disbursed and significant funds remaining undisbursed, primarily due to slow progress on the Islamabad West Substation contract.
According to Bank’s documents, overall implementation progress has picked up but remains rated “Moderately Satisfactory”, while progress towards achieving the project’s development objectives has retained the same rating.
The project, being implemented by the National Transmission and Despatch Company (NTDC), now National Grid Company (NGC), was approved in December 2017 to enhance the capacity and reliability of selected sections of the national transmission network and modernise the company’s key business processes.
The documents showed that against the original USD 425 million financing, the Bank has disbursed USD 255.53 million, while USD 124.31 million remains undisbursed. The project is scheduled to close on December 31, 2026, leaving a limited period for the implementing agency to accelerate execution and utilise the remaining financing.
The Islamabad West Substation (IWS) contract has been identified as the primary reason for the significant undisbursed balance.
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The project has also fallen substantially behind several of its original physical implementation targets following repeated revisions in scope.
Against the original target of 36 new or augmented substations, the number has been reduced to 24, of which only 17 had been completed as of November 2025.
Similarly, the target for construction or rehabilitation of transmission lines has been scaled down from 131 kilometres to 11 kilometres, while the report records 7.2 kilometres completed.
The reduction in transmission losses, another key performance indicator, stood at 24.31 gigawatt-hours against the revised target of 414 GWh.
The report also highlights substantial changes in the project’s expected contribution to improving transmission system reliability. The original scope envisaged augmentation or extension of 31 substations, subsequently reduced to 22.
Additional substation capacity stood at 3.18 million kilovolt-amperes (kVA) against the revised target of 12.516 million kVA, indicating a significant implementation gap.
The project’s greenhouse gas reduction indicator was recorded at 0.53 tonnes per year against a revised target of 2.11 tonnes. The Bank noted that these estimates were calculated on the assumption that every additional kVA of transmission capacity would replace an equivalent amount of diesel-based generation.
On the institutional modernisation front, the deployment of the Enterprise Resource Planning (ERP) system remains behind schedule. The report recorded that the system was not operational as of November 2025, although NTDC had earlier expected it to become operational by April 2026.
The Bank has maintained the overall project risk rating at “Substantial”. Political and governance, sector strategies and policies, and institutional capacity for implementation and sustainability continue to carry substantial risk ratings.
The fiduciary risk rating has also been raised from Moderate to Substantial, while environmental and social risks remain Moderate.
Some progress has been reported in improving the company’s financial management. The time required to submit audited financial statements has declined from 14 months to five months, against a closing target of six months.
The new integrated budgeting and reporting system has also been reported as operational.
However, the report indicates that the project has undergone three Level-II restructurings, approved in October 2023, January 2024 and February 2025, reflecting successive adjustments to its implementation arrangements and targets.
The World Bank’s latest assessment underscores the challenge facing the implementing agency in completing the remaining activities before the revised closing date, particularly the delayed Islamabad West Substation contract and the significant gap between revised physical targets and actual achievements.
Copyright Business Recorder, 2026