Pak to get $220 mn from Asian Dev Bank for PTEI

Faisalabad: Asian Development Bank (ADB) agreed to provide second tranche of $220 million under Multi-tranche Financing Facility (MFF) to Pakistan for Power Transmission Enhancement Investment Program(PTEI), while a follow-up mission of ADB will visit during the first quarter of 2008 to review implementation of proposed project management remedial measures.

According to ADB sources, Tranche-1 of MFF between the Asian Development Bank (ADB) and the National Transmission and Dispatch Company (NTDC) for the Power Transmission Enhancement Investment Program (the Program) comprises Loan 2289-PAK for $226 million and Loan 2290-PAK for $10 million. Loan 2289-PAK supports investment in new transmission assets. Loan 2290-PAK supports the preparation and monitoring of financing tranches and capacity strengthening of NTDC.

The investment project comprises 19 sub projects covering new substations and additions to existing substations, the installation of compensation equipment, and a new overhead line. Planned completion dates are staggered from mid-2007 to mid-2009.

ADB sources mentioned that the Program is closely linked to Pakistan's long-term power sector strategy and is an integral part of the power transmission development program. The Program will enhance the efficiency of the overall power transmission system and provide adequate and reliable transmission of power supply to a greater number of industrial, commercial, and residential consumers.

The sources pointed out that the sub projects under the Program will improve power transmission infrastructure through the rehabilitation, augmentation, and expansion of the primary (above 220 kilovolt) transmission network and relieve transmission bottlenecks in the power system. Specifically, (i) NTDC will adhere to its transmission license conditions and comply with the grid security code, (ii) about 10.5 gigawatt-hours of additional power will be supplied through the national grid annually, (iii) the system will be capable of meeting peak demand, with electricity outages significantly reduced by 30% in 2011, and (iv) grid-connected customers will increased to 70% of the population in 2011.

The ongoing Program has two components. First, it will finance subprojects that are part of NTDC's investment plan. Second, it will finance a program support component. The total cost of NTDC's 2006-2016 investment plan is $3.9 billion equivalent to be financed 20 percent by ADB, 30 percent by NTDC and 50 percent by other financiers.

The total cost of Tranche-1 is $292 million of which $282 million is for financing of the subprojects and $10 million is for program support. ADB agreed to finance 80percent of the subprojects and 100% of the program support. NTDC will finance the remaining 20 percent of the subprojects.

The total cost of Tranche-2 is $276 million. ADB has agreed to finance 80 percent of this amount while NTDC will finance the remaining 20 percent. ADB report stated that Loan 2289-PAK covers the addition of 5,965 megavolt-amperes of new transformation capacity.

The Program is broken into 19 subprojects: (i) three new 220 kV transformer and switching substations, (ii) transformer additions in five existing 500 kV and nine existing 220 kV substations, (iii) the installation of static var compensation equipment, and (iv) 50 kilometers of 220 kV overhead line. Completion dates are staggered from mid-2007 to mid-2009, with the total cost estimated at $282 million.