World Bank Approves $376 Million to Modernize Pakistan's Power Grid

Pakistan's transmission network has faced persistent challenges from grid instability and transmission bottlenecks, limiting the efficient delivery of electricity and preventing the full use of available renewable energy resources.

The World Bank has approved US$375.9 million in financing for Pakistan's Grid Stability Enhancement Project, marking the first phase of a 10-year programme designed to modernize the country's electricity transmission network, improve energy reliability and support the expansion of renewable power. The project falls under the Boosting Energy Security through Transmission in Pakistan (BEST-PAK) programme, which seeks to reduce power outages, strengthen grid resilience and deliver more reliable electricity to households, businesses and industries.

World Bank Country Director for Pakistan Bolormaa Amgaabazar said strengthening the country's transmission infrastructure will help lower electricity costs, improve energy security and create a stronger foundation for economic growth while allowing more renewable energy to be integrated into the national grid.

Modern Equipment to Unlock More Renewable Power

Pakistan's transmission network has faced persistent challenges from grid instability and transmission bottlenecks, limiting the efficient delivery of electricity and preventing the full use of available renewable energy resources.

The project will install advanced grid stabilization equipment, including Static Synchronous Compensators (STATCOMs) at three major 500-kilovolt substations, along with fixed reactors and capacitor banks across 26 substations nationwide. These upgrades will allow an additional 640 megawatts (MW) of currently restricted wind energy to reach the national grid, enabling the full use of 1,840 MW of wind power generated in southern Pakistan.

The stronger transmission system will also support the integration of about 491 MW of new private sector renewable energy projects. Together, these improvements will contribute to Pakistan's target of generating 60 percent of its electricity from renewable sources by 2030, in line with its commitments under the Paris Agreement. Over the project's 25-year lifespan, it is expected to prevent around 20.8 million tonnes of carbon dioxide emissions, including approximately 832,500 tonnes each year.

Reforms and Climate Resilience Strengthen Energy Future

The investment also supports the government's ongoing reforms of the electricity transmission sector, including restructuring the National Transmission & Dispatch Company (NTDC) into specialised successor organisations. These reforms are intended to improve governance, operational efficiency, accountability and the long-term financial sustainability of Pakistan's power sector while creating conditions for greater private investment.

World Bank Lead Energy Specialist Waleed Saleh Alsuraih said the project provides an important pathway for expanding clean energy, strengthening energy security and building a more commercially sustainable transmission network. Recognising Pakistan's vulnerability to climate-related disasters such as floods and extreme heat, all new infrastructure will be built using climate-resilient standards. Equipment will be installed on elevated platforms to reduce flood risks and designed to operate in temperatures of up to 55°C, helping maintain a reliable electricity supply during severe weather and heatwaves.