Manila, Dec 23, 2006 AEST (ABN Newswire) - Asian Development Bank (ASX: ATB) is supporting the Pakistan Government's program to remove transmission bottlenecks to power delivery through a multitranche financing facility amounting to US$800 million.
The funds will rehabilitate and expand parts of the country's transmission system to meet present and anticipated future demand and ensure the system's continued operation and maintenance.
Excess load on transmission lines at substations is one of the critical factors causing transmission and distribution losses in Pakistan's power system. At the end of FY2006, more than three quarters of the country's 500 kiloVolt and 69% of its 220 kV transformers were overloaded.
"Pakistan's present transmission system faces considerable risks and costly servicing because it is operating at or above rating limits," says Rune Stroem, an ADB Principal Energy Specialist. "The system as it stands cannot keep up with present demand and risks major delivery constraints. Providing more reliable power is essential for growth and expansion of Pakistan's economy and, in turn, economic and social development."
Recognizing these issues, the country's sole transmission company, the National Transmission and Dispatch Company (NTDC), in coordination with the Ministry of Water and Power, has prepared a Transmission Sector Road Map for 2007-2016. Through an investment plan estimated at $3.9 billion, this will address the system's current shortcomings.
ADB's Power Transmission Enhancement Investment Program will meet about 20% of this cost over the 10-year period. Using the multitranche financing facility, the Government can make period financing requests that will be converted to separate loans.
The first request amounts to $226 million from ADB's ordinary capital resources (OCR) and $10 million from its soft loan facility, the Asian Development Fund (ADF). The OCR money will fund 19 subprojects to provide 26 transformers, two new substations, 50 kilometers of transmission line and one static var compensator. The ADF financing will support NTDC's project, planning, design, implementation, operations, and monitoring for the duration of the entire program.
All financing from OCR resources will have a 20-year term, including a grace period of three years. Interest is to be determined in accordance with ADB's LIBOR-based lending facility. The ADF loan will have a 32-year term, including a grace period of eight years. Interest is charged at 1% per annum during the grace period and 1.5% per annum subsequently. The executing agency for the program is NTDC.
Contact
Graham Dwyer
Email: gdwyer@adb.org
Tel:+632 632 5253;
Mobile: +63 920 938-6487
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