WEB DESK: The Asian Development Bank (ADB) has approved an 810 million dollar multi-tranche financing facility (MFF) for Pakistan’s obsolete and deficient transmission system.
The MFF is a lending modality that, as per an evaluation by ADB’s independent evaluation department, is favoured by Pakistan as it allows “financing predictability, lower investment processing time, and cost savings. It also likes the greater responsibility placed on its agencies, and the multiple entry points of discussions and help during implementation.”
There is no question that this MFF facility is much-needed to enhance the transmission system in the country given its extremely limited capacity that, as per a former Secretary Water and Power, has the capability to transmit a maximum of 15000MW. The Sharif administration’s commitment to end energy shortages by the end of its tenure in little over a year and a half has so far focused on energy generation projects, ranging from coal-fired projects to hydel projects to LNG-based power plants.
However, without a concurrent enhancement of transmission network raising generation capacity is unlikely to make a difference in the hours of load-shedding. Thus in this context, this particular MFF must be appreciated.
It may be recalled that recently the Chief Minister of Khyber Pakhtunkhwa Pervez Khattak warned the federal government to ensure that the province receives its due share of electricity or else face the consequences; however a Business Recorder exclusive revealed that a major reason for the federal government’s inability to ensure that the province receives its due share is the inability of the transmission lines to take the requisite load. Thus this particular MFF loan can and must be fully supported.
It is however unclear whether this is a new MFF facility or the fourth tranche of the facility approved in 2006. According to the ADB website: “ADB approved a multi-tranche financing facility (MFF) for the Power Transmission Enhancement Investment Programme on 13th December 2016 (the date is clearly incorrect) for an amount not exceeding $800 million.
Under tranche 4 the government seeks ADB financing for 10 sub-projects covering (i) line bay extension and 281 kilometers (km) of 500-kilovolt (kV) transmission line from the 500-kV Muzaffargarh grid station for electricity evacuation from the 747MW Guddu power plant; (ii) four new 220-kV grid stations and in/out transmission lines at Chakdara, D. I. Khan, Lalian and Nowshehra; (iii) installation of a static var system (SVS) at 220-/132-kV Quetta industrial grid station; (iv) extension of 500-kV grid stations at Jamshoro and Gujranwala, and augmentation of 500-kV grid station at Rewat; and (v) the procurement of construction and operational equipment”.
To conclude, there is an emergent need to enhance transmission lines and for this purpose any loan, even those incurred at the market rate as most ADB loans for infrastructure development are, can be supported. However, one would seek some clarification as to whether this particular loan is the fourth tranche of the MFF or a new MFF.
Source: Business Recorder