Pakistan Set to Receive Over $378 Million World Bank Loan for Energy Sector Overhaul

ISLAMABAD — Pakistan is set to receive a $378.9 million loan from the International Bank for Reconstruction and Development (IBRD) to modernize its power transmission infrastructure.
Co-financing partners include the Asian Infrastructure Investment Bank (AIIB), contributing $92.5 million, and the Islamic Development Bank (IsDB), adding $92.7 million, bringing the total expected project funding to nearly $698.75 million. 
The project’s primary objective is to improve transmission performance, enhance energy security, and enable greater deployment of renewable energy. A key component includes the development of a 500-kV transmission corridor from Matiari to Rahim Yar Khan to reduce congestion across the south-center-north electricity network. 
The World Bank has flagged deep-rooted structural problems in Pakistan’s power sector. Transmission bottlenecks have already forced reliance on expensive LNG-based power generation, increasing electricity costs and financial losses within the sector.  Assessments also highlight persistent weaknesses including low bill recovery rates, system losses, and aging grid infrastructure.
The project forms part of a 10-year reform program running from 2026 to 2035, aligned with Pakistan’s Transmission System Expansion Plan (TSEP 2024-34), with renewable energy targeted to reach 60 percent of the country’s energy mix by 2030.  (ProPakistani)
The program will also support the restructuring of the National Transmission and Dispatch Company (NTDC) and includes technical assistance for institutional reforms within the power transmission system.  (ProPakistani)