Pakistan is hoping to markedly reduce its level of power shortages with the help of an $810 million loan from the Asian Development Bank (ADB).
The country’s power sector is fighting to cope with the combination of rapidly growing demand, a shortage of generating capacity and poorly maintained transmission and distribution systems.
The ADB funds, to be released over ten years, will support the government’s aim of a safe and reliable power supply, and the expansion of power coverage in rural areas.
Power supply interruptions have become a frequent occurrence in Pakistan, and system losses from distribution companies can be as high as 33 per cent, says the ADB. Local press recently reported power shortfalls of over 5000 MW when power plants had to be shut down due to fuel shortages.
The financing facility is part of the ADB’s Power Distribution Enhancement Investment Programme for Pakistan, which will cost an estimated $5.2 billion between 2008 and 2017. This will focus on improving the country’s overloaded distribution sector, which the ADB says is constrained by power losses, capacity shortfalls and worn out infrastructure.
“A secure and predictable electricity supply will lead to social and economic benefits and improve conditions for schools, hospitals and other social services,” said Rune Stroem, a Principal Energy Specialist of ADB’s Central and West Asia Regional Department.
An estimated 12 000 GWh is needed to meet peak demand and provide power to an additional 30 million people that are not connected to the national grid. Pakistan’s GDP is expected to rise by eight per cent per year between 2005 and 2015.
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