ADB approves $330M in loans to strengthen Pakistan’s power transmission network

The Asian Development Bank (ADB) has approved $330 million in loans to Pakistan for the Second Power Transmission Strengthening Project, a major government initiative to expand the national transmission network and improve delivery of low-cost renewable and hydropower to key population centers.

According to ADB statement, the project includes construction of a new 500-kilovolt transmission line measuring approximately 290 kilometers, along with upgrades to critical grid infrastructure serving Islamabad and Faisalabad.

These investments aim to address long-standing constraints in Pakistan’s north–south power corridor. The upgrade will allow the transfer of up to 3,200 megawatts of clean energy from hydropower plants in northern Pakistan. Officials say this will reduce reliance on imported fuel, strengthen energy security, and support a more affordable and sustainable energy mix.

The initiative supports Pakistan’s broader power sector reforms and contributes to state-owned enterprise improvements. The project will enhance institutional, financial, operational, and governance systems of the National Grid Company of Pakistan Limited, formerly the National Transmission Dispatch Company. The agency will serve as the project’s executing body.

ADB’s financing package includes a $285 million loan from its ordinary capital resources and a $45 million concessional loan. The funds will help the National Grid Company expand and modernize transmission infrastructure, improve financial management, strengthen institutional capacity, and support gender equity and public outreach initiatives.

“This project represents ADB's strong partnership with Pakistan and our shared commitment to accelerate clean energy transition and integration, and to achieve a resilient and sustainable energy sector,” said ADB Country Director for Pakistan Emma Fan. She said the project aims to expand clean energy availability, reduce system costs, and support long-term sustainable economic development.

The project aligns with Pakistan’s National Power Policy 2021, Vision 2025, and Nationally Determined Contributions 2021. These focus on affordable clean power, climate resilience, energy security, and sustainable development. The new transmission infrastructure is also expected to lower technical losses, enhance grid reliability, and support financial sustainability of the energy sector.

ADB continues to work with Pakistan and development partners to expand access to cleaner and more reliable electricity while strengthening sector governance and reform.