ADB lends $242 million to Pakistan for power sector

The Asian Development Bank (ADB) will provide $242 million to Pakistan to help it modernise electricity transmission lines and curtail losses that have contributed to a crippling power shortage, the bank said on Friday.

The new loan is part of $810 million the Manila-based bank approved for Pakistan in 2008 for the country’s Power Distribution Enhancement Investment Programme, the bank said in a statement.

“This project will not only reduce electricity loss during delivery to the customers but also improve the quality of service,” said ADB’s country director, Rune Stroem, who signed the loan agreement with Pakistani officials on Friday.

Outdated power grids and rampant electricity theft mean that some grid companies experience line losses of up to 30 percent to 40 percent, energy experts say.

The project includes investments in a secondary transmission grid and will include the addition of 3,380 megavolt-amperes of transformer capacity, and 387 km of new distribution lines.

The bank this month also approved a loan of up to $100 million to U.K-based International Power PLC to build a gas-fired 404-megawatt power plant in the southwestern Baluchistan province, scheduled to be completed by September, 2013.

The power crisis has crippled industry, and frequent power outages, lasting up to 18 hours in some rural areas, led to violent protests last year.