The Asian Development Bank (ADB) has approved a $200 million loan to support Pakistan in modernizing its power distribution infrastructure and enhancing the capacity of distribution companies to provide reliable electricity.
This initiative, under the Power Distribution Strengthening Project, is a critical step toward addressing Pakistan’s growing energy demands and improving the resilience of its power infrastructure.
The project focuses on upgrading and modernizing distribution systems, aiming to reduce significant energy losses during transmission and increase resilience to climate change and disaster-related risks. Initially, it will target three major distribution companies: Lahore Electric Supply Company (LESCO), Multan Electric Power Company (MEPCO), and Sukkur Electric Power Company (SEPCO). These upgrades are expected to pave the way for a more efficient and sustainable energy delivery system in these regions.
“This project is part of ADB’s ongoing efforts to address challenges in Pakistan’s power sector,” said Yevgeniy Zhukov, ADB Director General for Central and West Asia. “Reliable grid-connected electricity improves the quality of life. The loss reduction and revenue protection measures supported by this project will also help reduce the power sector’s financial losses, alleviating at least one source of strain on the country’s economy.”
Key components of the project include the installation of over 332,000 advanced metering infrastructure systems, complemented by data management and communication systems. Additionally, at least 15,800 online transformer performance monitoring systems will be implemented in LESCO, MEPCO, and SEPCO. These measures will enhance real-time monitoring and efficiency in electricity consumption and grid performance.
SEPCO’s grid system will see significant voltage upgrades, with four grid stations transitioning from 66 kilovolt (kV) to 132 kV, reducing transmission losses and addressing growing electricity demand. LESCO will benefit from the construction and modernization of 25 grid stations, incorporating critical equipment. High-loss 11 kV feeder lines will also be replaced with aerial bundled conductor cables to improve efficiency and reduce energy theft.
“These upgrades will reduce losses, enhance revenue collection, and provide distribution companies with real-time data,” noted ADB Principal Energy Specialist Seung Duck Kim. “They will also improve response times during extreme weather, minimizing outages and ensuring quicker recovery.”
Beyond infrastructure improvements, the project will conduct studies to recommend policy reforms aimed at enhancing the operational efficiency and overall performance of the three targeted distribution companies.
Pakistan, a founding member of ADB, has received over $52 billion in financing since 1966. These investments have supported inclusive economic growth, improved infrastructure, and enhanced energy, food security, and social services. ADB remains committed to fostering a prosperous, inclusive, and sustainable Asia and the Pacific, while continuing its mission to eradicate extreme poverty.