The International Bank for Reconstruction and Development (IBRD) has approved to lend $379 million for a large-scale power transmission project in Pakistan.
The scheme is designed to improve energy security and promote effective utilisation of renewable energy with the installation of reactive power management systems.
The National Transmission and Despatch Company (NTDC) will be provided technical assistance for institutional reforms. The Asian Infrastructure Investment Bank (AIIB) and the Islamic Development Bank (IsDB) also agreed to co-finance the company, with an investment of $92.5 million from AIIB and $92.7 million from IsDB.
The World Bank is expected to approve the plan in March 2026 with the total financing amount climbing up to $698.75 million. The initiative hopes to achieve smooth operations without any delays in the transmission of energy for Pakistan’s energy sector.
The scheme’s primary objectives include the deployment of large-scale renewable energy, stabilising power grids and promoting sector reforms.
Renewable energy for Pakistan
In the first phase, the primary focus will be on reactive power devices which are crucial for highlighting grid reliability problems along with the integration of Variable Renewable Energy (VRE).
IsDB’s investment will finance several procurement packages of the initial phase. On the other hand, AIIB’s investment will co-finance measures for reactive power compensation technology.
The project duration is set to span from 2026 to 2035. It will revolve around two main objective such as a 500 kV transmission corridor and institutional reforms.
The project aims to modernise Pakistan’s energy transmission network by reducing dependency on thermal generation which has proved to be costly in the past. Another key objective of the scheme is to ensure the deployment of clean renewable energy.
