The World Bank has approved $375.9 million for Pakistan’s Grid Stability Enhancement Project. The funding launches the first phase of the Boosting Energy Security through Transmission in Pakistan (BEST-PAK) programme.
The initiative will run for 10 years. It aims to modernise Pakistan’s electricity transmission system, cut power outages and improve energy security.
The World Bank says Pakistan’s ageing transmission network struggles with grid instability and congestion. These problems disrupt electricity supplies, increase costs and prevent the country from using available renewable energy.
“Pakistan’s energy challenges are deeply interconnected with its broader economic stability,” World Bank Country Director for Pakistan Bolormaa Amgaabazar said.
“By investing in advanced technologies for more resilient transmission infrastructure, this project will contribute to reducing electricity costs, bringing more renewable energy onto the grid, and laying the groundwork for a power sector that works better for households, businesses and industries, as well as overall Pakistan’s economy,” she added.
Project will unlock more renewable energy
The project will strengthen electricity flow across the national grid. It will install Static Synchronous Compensators (STATCOMs) at three major 500 kV substations.
Engineers will also add fixed reactors and capacitor banks at 26 grid substations.
These upgrades will allow Pakistan to connect 640 megawatts of wind energy that currently cannot reach the national grid. The project will also enable full use of 1,840 MW of wind generation capacity in southern Pakistan.
In addition, the improved network will support nearly 491 MW of private sector renewable energy projects.
The World Bank said these investments will help Pakistan move closer to its target of generating 60 percent of electricity from renewable sources by 2030.
The organisation estimates the project will prevent about 832,500 tonnes of carbon dioxide emissions each year. Over 25 years, avoided emissions could exceed 20.8 million tonnes.
Grid reforms and climate resilience
The programme also supports the government’s reform of the National Transmission and Dispatch Company (NTDC). Officials plan to split the utility into specialised successor companies to improve governance, efficiency and accountability.
World Bank Lead Energy Specialist Waleed Saleh Alsuraih said reliable transmission remains critical for Pakistan’s energy future.
“A reliable and modern transmission grid was essential for Pakistan’s energy future,” he said.
“As the first phase of the BEST-PAK programme, it unlocks a pathway to large-scale clean energy deployment, stronger energy security, and a modern, commercially oriented transmission sector through targeted infrastructure investments and institutional reforms, creating the conditions for future private capital participation.”
The project also prepares Pakistan’s power system for climate change.
Engineers will place new installations on elevated platforms to reduce flood risks. They will also install equipment that can operate in temperatures as high as 55°C.
The World Bank believes these improvements will strengthen Pakistan’s electricity network, improve service reliability and support long-term economic growth while expanding the country’s clean energy capacity.
