The World Bank has approved $375.9 million in financing for Pakistan to modernise its electricity transmission network, marking the launch of a decade-long programme aimed at improving grid stability, expanding renewable energy integration and supporting reforms in the country’s power transmission sector.
The financing will be provided under the Grid Stability Enhancement Project, the first phase of the World Bank’s Boosting Energy Security through Transmission in Pakistan (BEST-PAK) Multiphase Programmatic Approach (MPA), which seeks to strengthen the national transmission system and reduce the technical constraints that have long undermined reliable electricity supply.
Pakistan’s transmission network has struggled with congestion and voltage instability, limiting the evacuation of electricity from existing power plants, particularly renewable energy projects. The World Bank said these bottlenecks have contributed to power outages, higher electricity costs and underutilisation of clean energy resources.
Under the project, advanced grid-stabilising technologies, including Static Synchronous Compensators (STATCOMs), will be installed at three key 500-kV substations, while fixed reactors and capacitor banks will be deployed at 26 substations across the country to improve voltage control and enhance the efficiency of power transmission.
The upgrades are expected to unlock 640MW of wind power that is currently being curtailed due to transmission constraints, enabling the full evacuation of 1,840MW of installed wind generation capacity in southern Pakistan. The strengthened grid will also facilitate the integration of approximately 491MW of new private sector renewable energy projects planned in the coming years.
World Bank Country Director for Pakistan Bolormaa Amgaabazar said the investment would help address Pakistan’s energy security challenges by improving transmission infrastructure, lowering electricity costs and creating a more reliable power system capable of supporting economic growth.
According to the World Bank, the project will also contribute to Pakistan’s commitment to increase the share of renewable energy in its electricity generation mix to 60 percent by 2030 while reducing greenhouse gas emissions. It is expected to avoid around 832,500 tonnes of carbon dioxide emissions annually, or more than 20.8 million tonnes over its estimated 25-year lifetime.
Besides infrastructure investments, the project will support the government’s ongoing reforms to restructure the National Transmission and Dispatch Company (NTDC) into specialised successor entities aimed at improving governance, accountability, operational efficiency and the commercial performance of the transmission sector.
The World Bank said climate resilience has been incorporated into the project design, with new transmission installations being built to withstand flooding and temperatures of up to 55 degrees Celsius, ensuring the grid remains operational during increasingly frequent extreme weather events.
