ADB Approves $200M Loan to Modernize Power Distribution Infrastructure in Pakistan

This project is expected to significantly enhance the efficiency and sustainability of Pakistan's power distribution network, providing a foundation for more reliable and cost-effective electricity for millions of citizens.

The Asian Development Bank (ADB) has approved a $200 million loan to modernize Pakistan’s power distribution infrastructure and enhance the reliability of electricity delivery. The Power Distribution Strengthening Project is designed to upgrade the country’s distribution systems to meet growing electricity demand while addressing issues of energy loss and improving resilience to climate change and disasters.

The project will focus on three major distribution companies: Lahore Electric Supply Company (LESCO), Multan Electric Power Company (MEPCO), and Sukkur Electric Power Company (SEPCO). These companies will benefit from the modernization of their infrastructure, which will help streamline energy delivery and reduce transmission losses.

According to ADB Director General for Central and West Asia Yevgeniy Zhukov, “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 advanced metering infrastructure, data management systems, and online transformer performance monitoring systems across the three distribution companies. Specifically, at least 332,000 smart meters and 15,800 monitoring systems will be deployed. The project will also upgrade the voltage of four grid stations in SEPCO from 66 kV to 132 kV, reducing transmission losses and addressing the rising electricity demand in the region. Additionally, at least 25 grid stations in LESCO will be modernized, with critical equipment installed and high-loss 11 kV feeder lines replaced by aerial bundled conductor cables.

These upgrades aim to reduce energy losses, improve revenue collection, and provide real-time data on electricity consumption and grid performance. They will also enhance the ability to quickly identify and isolate faults, minimizing outages, especially during extreme weather events.

In addition to these infrastructure upgrades, the project will conduct studies to develop policy reforms and recommendations to improve the operational efficiency of LESCO, MEPCO, and SEPCO, fostering long-term improvements in the power sector.

Since its inception in 1966, ADB has been a key partner for Pakistan, committing over $52 billion in loans, grants, and other financial support for the country’s infrastructure, energy, transport, and social services sectors. The new loan is part of ADB’s ongoing efforts to support Pakistan’s energy sector and promote inclusive economic growth.

This project is expected to significantly enhance the efficiency and sustainability of Pakistan's power distribution network, providing a foundation for more reliable and cost-effective electricity for millions of citizens.