Pakistan has secured nearly $376 million in financing from the World Bank to strengthen its electricity transmission system, a move aimed at reducing power outages, improving grid reliability and helping the country make greater use of renewable energy.
The World Bank’s Board of Executive Directors approved $375.9 million for the Grid Stability Enhancement Project, the first phase of the 10 year Boosting Energy Security through Transmission in Pakistan (BEST-PAK) programme.
The project is designed to modernise Pakistan’s ageing transmission network, which has long faced stability issues and capacity constraints that prevent electricity from reaching consumers efficiently. These weaknesses have contributed to frequent power interruptions, higher costs and the underuse of renewable energy, particularly wind power.
World Bank Country Director for Pakistan Bolormaa Amgaabazar said the country’s energy sector remained closely linked to its wider economic performance.
She said investing in modern transmission technology would strengthen the power network, lower electricity costs over time and enable more renewable energy to be delivered to homes, businesses and industries. She added that the project would also support Pakistan’s broader economic growth by improving the performance of the electricity sector.
The investment will introduce advanced grid equipment at key locations across the country. This includes installing Static Synchronous Compensators, commonly known as STATCOMs, at three major 500 kilovolt substations, alongside reactors and capacitor banks at 26 other substations.
These upgrades are expected to unlock 640 megawatts of wind power that is currently unable to reach the national grid because of transmission limitations. Once completed, the improvements will allow the full utilisation of 1,840MW of wind generation capacity in southern Pakistan while also creating room for another 491MW of private sector renewable energy projects.
The World Bank said the project supports Pakistan’s goal of generating 60 percent of its electricity from renewable sources by 2030, in line with the country’s climate commitments under the Paris Agreement.
The lender estimates the project will prevent around 832,500 tonnes of carbon dioxide emissions each year. Over a 25 year period, that would amount to more than 20.8 million tonnes of avoided emissions.
Beyond infrastructure upgrades, the project also supports reforms in the transmission sector. It backs the government’s plan to restructure the National Transmission and Dispatch Company into specialised successor organisations to improve governance, accountability and operational efficiency.
The World Bank also noted that Pakistan faces increasing climate risks, including floods and extreme heat. To address these challenges, all new installations will be built to climate resilient standards, including elevated platforms to reduce flood damage and equipment capable of operating in temperatures as high as 55 degrees Celsius. It said these measures would help ensure the transmission network remains reliable during monsoon seasons and prolonged heatwaves.
