World Bank approves $375.9 million to improve Pakistan's electricity distribution system

Islamabad (Web Desk): The World Bank has sanctioned financial assistance amounting to $375.9 million for a major initiative aimed at upgrading Pakistan’s electricity transmission system and improving the reliability of power supply across the country.

The funding was approved during a meeting of the World Bank’s Board of Executive Directors held in Washington.

According to a statement issued by the World Bank, the financing will support Pakistan’s Grid Stability Enhancement Project, which forms the opening phase of the Boosting Energy Security through Transmission in Pakistan Multiphase Programmatic Approach.

The initiative is intended to reinforce the national transmission network and enhance the overall performance of the power sector.

As the first stage of a 10-year programme, the project seeks to modernise Pakistan’s electricity transmission infrastructure, minimise power interruptions and facilitate the delivery of cleaner energy to households, commercial users and industries.

The plan includes the installation of advanced grid management technology to strengthen system stability and ensure smoother electricity transmission through strategically important substations.

Among the key upgrades are Static Synchronous Compensators (STATCOMs) to be installed at three major 500-kilovolt substations, along with fixed reactors and capacitor banks at 26 grid substations nationwide.

These improvements are expected to unlock 640 megawatts of wind-generated electricity that is currently unable to reach consumers, allowing the country to fully utilise 1,840 megawatts of wind power capacity in southern Pakistan by efficiently transmitting electricity to high-demand regions.

The enhanced transmission network will also make it possible to connect around 491 megawatts of upcoming privately developed renewable energy projects.

Together, these measures will help Pakistan move closer to its target of sourcing 60 percent of its electricity from renewable energy by 2030, in accordance with the country's Nationally Determined Contribution under the Paris Agreement.

World Bank Country Director for Pakistan Bolormaa Amgaabazar said the country's energy sector issues are closely linked to its wider economic performance.

She noted that investing in modern transmission technologies would create a stronger and more dependable electricity network, lower power costs and enable greater integration of renewable energy into the national grid.

She added that the initiative would lay the foundation for a more efficient and resilient power sector capable of better serving households, businesses and industries while supporting Pakistan’s long-term economic development.