Islamabad: The World Bank’s Board of Executive Directors has approved $375.9 million in financing for Pakistan’s Grid Stability Enhancement Project, marking the first phase of a 10-year programme aimed at strengthening the country’s electricity transmission system and improving energy security.
According to the World Bank, the project falls under the Boosting Energy Security through Transmission in Pakistan (BEST-PAK) programme and seeks to modernise the national grid, reduce electricity outages and enable greater integration of renewable energy into Pakistan’s power system.
World Bank Country Director for Pakistan Bolormaa Amgaabazar said Pakistan’s energy challenges are closely linked to its broader economic stability. She noted that investment in advanced transmission infrastructure would lower electricity costs, improve grid reliability, expand the use of renewable energy and support households, businesses and industries while contributing to overall economic growth.
Pakistan’s power transmission network has faced persistent challenges, including grid instability and transmission bottlenecks that limit the reliable delivery of electricity and prevent the full utilisation of clean energy resources. These issues have resulted in frequent power outages, higher electricity costs and reduced economic productivity across the country.
The project will introduce advanced technologies to strengthen the national grid, including the installation of Static Synchronous Compensators (STATCOMs) at three major 500-kilovolt substations, along with fixed reactors and capacitor banks at 26 grid stations. These upgrades are expected to improve voltage stability and increase the efficiency of electricity transmission.
The improvements will enable approximately 640 megawatts of currently unused wind-generated electricity to be integrated into the national grid, allowing the full utilisation of 1,840 megawatts of wind power capacity in southern Pakistan. The project will also facilitate the integration of nearly 491 megawatts of planned private-sector renewable energy projects.
The World Bank stated that these investments will support Pakistan’s objective of generating 60 percent of its electricity from renewable energy by 2030, in line with the country’s commitments under the Paris Climate Agreement.
The project is expected to prevent around 832,500 tonnes of carbon dioxide emissions annually, amounting to more than 20.8 million tonnes over a 25-year period.
World Bank Lead Energy Specialist Waleed Saleh Alsuraih described a modern and reliable transmission network as essential for Pakistan’s energy future. He said the project would pave the way for large-scale renewable energy deployment, strengthen energy security and promote institutional reforms that would make the transmission sector more commercially efficient and attractive for future private investment.
The initiative will also support the government’s ongoing reforms in the power sector, including the restructuring of the National Transmission and Dispatch Company (NTDC) into specialised successor organisations aimed at improving governance, accountability, operational efficiency and the long-term sustainability of the electricity sector.
Recognising Pakistan’s vulnerability to climate change, the World Bank said all new infrastructure under the project will meet climate-resilient standards. Equipment will be installed on elevated platforms to reduce flood risks and designed to operate in temperatures of up to 55 degrees Celsius, ensuring reliable performance during floods and extreme heat.
