ADB approves $200m loan for modernisation of power distribution sector

• Project to include installation of advanced metering infrastructure.
• At least 25 grid stations to be constructed, modernised in Lesco.
• Voltage of four Sepco grid stations will be upgraded to 132 kV.

ISLAMABAD: The Asian Development Bank (ADB) has approved a $200 million loan for Pakistan for the modernisation of the country's power distribution infrastructure.

The grant, as per the ADB's press release issued on Wednesday, will be used to improve distribution companies' (Discos) ability to deliver reliable electricity.  

The lender's "Power Distribution Strengthening Project" will focus on reducing significant energy losses during transit and enhancing the resilience of infrastructure against climate change and disaster-related risks.

In its initial phase, the project will support three major distribution companies namely Lahore Electric Supply Company (Lesco), Multan Electric Power Company (Mepco), and Sukkur Electric Power Company (Sepco) for more efficient and sustainable energy delivery across these regions.

Furthermore, it would also feature the installation of at least 332,000 advanced metering infrastructure, along with data management and communication systems, and at least 15,800 online transformer performance monitoring systems in Lesco, Mepco, and Sepco.

The voltage of four grid stations in Sepco will also be upgraded from 66 kilovolts (kV) to 132 kV, a critical enhancement that will mitigate losses across the transmission system and address growing electricity demand.

In Lesco, at least 25 grid stations will be constructed and modernised with the provision of critical equipment. High-loss 11 kV feeder lines will be replaced with aerial bundled conductor cables, and feeder line configuration will be improved.

Also, the project will also study reform actions and policy recommendations that would improve the operational efficiency and overall performance of these three distribution companies.

Underscoring the significance of the initiative, ADB Director General for Central and West Asia Yevgeniy Zhukov said: "Reliable grid-connected electricity improves the quality of life. The loss reduction and revenue protection measures supported by this project will also help reduce the power sector’s financial losses — alleviating at least one source of strain on the country’s economy".

Meanwhile, ADB Principal Energy Specialist Seung Duck Kim noted that the upgrades in the power distribution sector would reduce losses, enhance revenue collection, and provide distribution companies with real-time data on electricity consumption and grid performance.

"In the event of extreme weather, they can help identify and isolate faults quickly, reducing the time required for recovery and minimising outages," he remarked.