The government on Thursday signed loan and grant agreements worth $284 million with the Asian Development Bank (ADB) in order to "improve Pakistan's power transmission network", stated a press release issued by ADB.

The agreement was signed at a ceremony in Islamabad by ADB Country Director for Pakistan, Xiaohong Yang, and Secretary Economic Affairs Division Noor Ahmed.

"The project will help provide a more stable and secure electricity supply, so people and businesses can continue their productivity and contribution to the economy," Yang said, adding: "ADB was working with the government as well as private sector to further develop Pakistan’s power supply chain, including expanding the power transmission network".

This agreement is the third tranche of a multi-tranche financing facility (MFF) under the ADB-supported Second Power Transmission Investment Program.

"The MFF aims to develop a stronger, smarter, greener, and more climate resilient power transmission system in Pakistan," the press release stated.

The tranche comprises a $280 million loan from ADB's ordinary capital resources as well as a $4 million grant from the High-Level Technology Fund (HLTF) to help the National Transmission and Dispatch Company Limited (NTDC) meet the country’s electricity demand of 1,150 megawatts "efficiently and reliably".

In an attempt to achieve this, it will deploy high-level technologies and climate-resilient transmission systems through load centers in Punjab.

The investment in the power transmission network — the first investment of its kind by ADB in the country — will pilot large-scale, grid-connected battery energy storage system, which will help NTDC "comply with national standards and best practices in power distribution".

It will also enhance the NTDC’s capacity to dispatch intermittent renewable energy.

This investment will also facilitate the development of ancillary services market which is an important component of the future competitive power market.

"The capacity building component of Tranche 3 will support the government in preparing an energy storage system roadmap to leverage the country’s rich indigenous renewable energy potential for longer term energy security," said Yang.