ADB Supports Pakistan’s Clean Energy Transition With $330 Million For Grid Expansion And Modernization

The Asian Development Bank (ADB) has approved $330 million in loans to Pakistan for the Second Power Transmission Strengthening Project, a key government initiative aimed at expanding the national transmission network and enabling the delivery of low-cost renewable and hydropower to major demand centers. This project is one of Pakistan’s top-priority investments to modernize the electricity grid and improve energy access across the country.

As part of the project, a new 500-kilovolt transmission line spanning approximately 290 kilometers will be constructed, and critical grid infrastructure supplying Islamabad and Faisalabad will be upgraded. These improvements will help overcome long-standing bottlenecks in Pakistan’s north–south power corridor, allowing the transfer of up to 3,200 megawatts of clean energy from northern hydropower plants. By enabling greater use of domestic renewable resources, the project will reduce dependence on imported fuels, enhance energy security, and support Pakistan’s transition to a more affordable and sustainable energy mix.

The initiative also strengthens broader power sector reforms and supports state-owned enterprise reforms. The National Grid Company of Pakistan Limited (NGC), formerly the National Transmission Dispatch Company (NTDC), will serve as the executing agency, benefiting from improvements in institutional, financial, operational, and governance capacities to become a modern and efficient grid operator.

ADB’s financing package includes a $285 million loan from its ordinary capital resources and a $45 million concessional loan. This funding will enable NGC to expand and modernize transmission assets, enhance institutional capacity, improve financial management, and implement public outreach and gender equity initiatives.

Emma Fan, ADB Country Director for Pakistan, emphasized that the project underscores ADB’s commitment to supporting Pakistan’s clean energy transition and resilient energy sector. By expanding transmission capacity and facilitating the integration of low-cost hydropower, the project will improve access to clean electricity, lower system costs, and contribute to long-term sustainable economic development.

The Second Power Transmission Strengthening Project aligns with Pakistan’s National Power Policy (2021), Vision 2025, and its Nationally Determined Contributions (2021), which prioritize energy security, climate resilience, affordable clean power, and sustainable growth. The new infrastructure will also reduce technical losses, increase grid reliability, and promote financial sustainability within the energy sector.

ADB continues to collaborate with Pakistan and other development partners to advance sector reforms, strengthen governance, and expand access to greener and more reliable electricity. Founded in 1966, ADB is a leading multilateral development bank that supports inclusive, resilient, and sustainable growth across Asia and the Pacific. Owned by 69 members, including 50 from the region, ADB works with governments and partners to address complex challenges, build quality infrastructure, and promote environmental sustainability.