Financing will modernise the transmission network, improve grid stability and support renewable energy integration
ISLAMABAD: The World Bank has approved $375.9 million in financing for the World Bank Pakistan power grid project, launching the first phase of a 10-year programme to modernise the country’s electricity transmission network, reduce power outages and accelerate the integration of renewable energy.
The project will be implemented under the Boosting Energy Security through Transmission in Pakistan (BEST-PAK) Multiphase Programmatic Approach and is designed to strengthen the national transmission system while supporting Pakistan’s transition to a more reliable, efficient and sustainable power sector.
Modernising Pakistan’s Transmission Network
World Bank Country Director for Pakistan Bolormaa Amgaabazar said Pakistan’s energy challenges are closely linked to the country’s broader economic stability.
She said investments in advanced transmission technologies would help lower electricity costs, improve grid reliability and enable greater integration of renewable energy into the national power system.
According to the World Bank, the World Bank Pakistan power grid project will help create a more resilient electricity sector that better serves households, businesses and industries while supporting long-term economic growth.
Pakistan’s transmission network has long faced bottlenecks and grid instability, contributing to frequent power outages, higher electricity costs and limited utilisation of renewable energy resources.
Grid Upgrades to Improve Reliability
The project includes the installation of Static Synchronous Compensators (STATCOMs) at three major 500-kilovolt substations to enhance voltage stability and improve grid performance.
Fixed reactors and capacitor banks will also be installed across 26 substations to strengthen electricity flow and improve system stability nationwide.
The upgrades are expected to enable the transmission of 640 megawatts (MW) of currently curtailed wind power, allowing the full utilisation of 1,840 MW of installed wind generation capacity in southern Pakistan.
In addition, the project will facilitate the integration of approximately 491 MW of planned private sector-led renewable energy projects into the national grid.
Supporting Pakistan’s Renewable Energy Goals
The World Bank said the World Bank Pakistan power grid project will contribute to Pakistan’s target of generating 60% of its electricity from renewable sources by 2030, in line with the country’s Nationally Determined Contribution under the Paris Agreement.
Over its estimated 25-year operational life, the project is expected to reduce carbon dioxide emissions by around 832,500 tonnes annually, resulting in cumulative emissions reductions exceeding 20.8 million tonnes.
World Bank Lead Energy Specialist Waleed Saleh Alsuraih said a modern and reliable transmission network is essential for Pakistan’s energy future.
He added that the investment will support large-scale deployment of clean energy, improve energy security, strengthen the commercial viability of the transmission sector and encourage greater private sector investment.
Backing Power Sector Reforms
The initiative also supports the government’s ongoing reforms of the electricity transmission sector, including the restructuring of the National Transmission and Dispatch Company (NTDC) into specialised successor entities aimed at improving governance, operational efficiency, accountability and long-term financial sustainability.
Recognising Pakistan’s vulnerability to climate-related risks, including floods and extreme heat, the project incorporates climate-resilient infrastructure standards.
New installations will be constructed on elevated platforms to minimise flood risks, while critical equipment will be designed to operate in temperatures of up to 55°C, ensuring reliable performance during heatwaves and the monsoon season.