World Bank grants $ 825 mln loan to improve power transmission system
ISLAMABAD: The World Bank approved a package of $825 million to improve the national power transmission system and help the government overcome financial management inefficiencies.
“The $425 million National Transmission Modernization Project-I (NTMP-I) will modernise the national transmission system to enable new power generation to reach consumers by upgrading, expanding and rehabilitating selected 500kV (kilovolt) and 220kV substations and transmission lines,” the Bank’s statement said.
NTMP-I will improve supply reliability and lower losses in the transmission network. The project will also modernise the information and communication technology infrastructure and strengthen financial and accounting systems of the National Transmission and Dispatch Company using information technology. The project aims at improving operational efficiency and business decision-making processes, leading to higher productivity and upgraded staff skills.
International Bank for Reconstruction and Development, part of the World Bank Group that lends to credit-worthy low and middle income countries financed NTMP. It is a fixed-spread loan with a maturity of 21 years, including a grace period of six years.
“With a substantial volume of new generation now coming online, the strengthening of the transmission and distribution systems is critical,” the statement quoted Illango Patchamuthu, country director for Pakistan at World Bank as saying. “The improved power supply will help meet the unserved demand from consumers and reduce the number and duration of power outages.”
Government officials said approximately 10,000 megawatts of electricity would be added to the system during the next year.
Another $400 million public financial management reform program by the World Bank will address challenges in public financial management through the enactment of a robust public finance management law, which will lead to decentralisation of payment and empower the frontline service delivery managers.
The International Development Association, the World Bank’s fund for the poor, financed the PFM reform program with a maturity of 25 years, including a grace period of five years.
The program will also focus on strong cash management, timely and comprehensive reporting, improved federal-provincial coordination, timely release of funds, streamlined payroll and pension systems, efficient and transparent procurement, and user-friendly reports for citizen engagement.