Around 12,000MW is planned to be added to the system under both CPEC and non-CPEC power projects until 2018, with another 22,000MW plus to be added beyond that. While it can be seen that the generation sector has been drawing a lot of attention, quite a bit of lack has been noticed on the strengthening the transmission and distribution side – an equally critical sector that is already overloaded with networks that hinder their power transfer competence, raising severe doubts on the system’s power evacuation ability in times of additions to capacity. Circular debt menace is also a product of this obsolete transmission and distribution segment.
A recent development for the transmission sector however, is the $810 million multi-tranche financing facility (MFF) approved by the Asian Development Bank (ADB). The multi-tranche financing facility (MFF) is defined by the ADB as a flexible financing instrument offered the ADB that enables it to provide assistance by aligning the provision of financing with project readiness and the long-term needs of a client.
The concurrent transmission system needs large scale investment besides key reforms taken to improve the regulator. In this context, MMF facility is much needed; the loan facility by the ADB will work on a phased rehabilitation of expansion, capacity and efficiency of the transmission network along with lending support to the government for promoting reforms in NTDC and CPPA.
The loan facility will be delivered in tranches from 2016 to 2026, distributed over a period of ten years. As per the plan, ADB is all set to help Pakistan lay down infrastructure to supplement the generation capacity with around 12 sub-projects proposed under the loan facility.
2018 has been the government’s favourite in lifting hopes for a load-shedding-free Pakistan. Under ideal generation status, a lot depends on the transmission sectors ability to evacuate power. On that note, let’s hope that the work on transmission expansion continues simultaneously; the first tranche of the MMF of about $150 million is coming this year, which will be used for extension work of the transmission system in Guddu, Sahiwal, Lahore, and Faisalabad.
