September 20, 2006	Wednesday	Sha'aban 26, 1427

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ISLAMABAD, Sept 19: The Asian Development Bank (ADB) has agreed to offer substantial financial assistance to Pakistan to help improve the country’s deteriorating power infrastructure and to initially release “the first tranche of $250 million by the end of 2006”.

Official sources told Dawn on Tuesday that the ADB has finalized a programme to extend soft loans under a phase scheme to meet most of the requirements of the National Transmission and Distribution Company (NTDC) for different projects planned for implementation under short-, medium- and long-term goals.

The ADB has offered “Multi-Tranche Financing Facility” through which the first tranche of $250 million will be made available by the end of this year. Furthermore, the ADB is expected to offer $350 million loan in the subsequent years.

The first tranche will cover several transmission system development projects of the NTDC for rehabilitation, extension, augmentation and expansion of the existing 5,000kv and 220kv transmission network and for evacuation of power from Independent Power Producers (IPPs), new hydro power projects and local/imported coal power projects. Implementation of the sub-project will not only increase system efficiency but will also help meet the growing demands of Wapda’s power distribution companies effectively.

It is understood that the facility could be extended further if there is request for financing by the government of Pakistan. For this purpose, a technical assistance of $0.5 million was extended to help the NTDC prepare projects acceptable to the ADB for funding which is a pre-requisite for the bank’s financing of the NTDC power transmission projects.

However, officials said that the NTDC has many projects to be submitted to the ADB for financing. Therefore, there is a need to have similar TA so that more projects could be prepared for financing under subsequent tranches.

The government has informed ADB officials that as economic activity picked up in recent years, there was a quantum jump in the power demand due to which the NTDC system has been subjected to stress and congestion at various strategic locations. As a result the “system was stretched beyond capacity and this caused overloading which sometimes resulted in outages”. This has necessitated that the transmission system be strengthened and expanded to fulfil the needs for secure, safe and reliable power supply and meet not only existing requirements but also the future demand of the country for sustained economic growth.

Key activities under the $250million programme will be undertaken through a team of international and domestic consultants together with the staff and management of the NTDC. The following major areas will be covered: preparation of feasibility studies and selection of sub-projects for financing, technical studies to evaluate and improve the NTDC transmission expansion plan, preparation of technical project design, performing economic and financial evaluations and capacity building of the NTDC.

In addition, the consultants will help the NTDC secure technology transfer and learning skills in power planning by arranging workshops and on-the-job training along with provision of relevant software. They will identify training needs and the personnel to be trained in each business segment of the NTDC.

The ADB has indicated to provide $0.6 million as part of the technical assistance for hiring local and international consultants.