ISLAMABAD: The electricity distribution companies of Peshawar, Multan and Hyderabad have been selected for a project to be financed by the World Bank to improve their operational efficiency and strengthen the capacity of the power sector to implement reforms.

The cost of the Electricity Distribution Efficiency Improve­ment project has been estimated at $252.96 million, which included $78.85m for improving grid reliability; $65.63m for modernising operations and management; $54.64m for capacity building and technical assistance $20m for reform support; $19.91m for administration and other costs; $13.94m for financing cost. The government will contribute $19.91m.

The project is likely to be approved by the World Bank this year and its implementation will continue till end of 2027, says the project document.

$252.96m scheme to be approved this year

The proposed project will support the Peshawar Electric Supply Company, Multan Electric Power Company and Hyderabad Electric Power Company by providing financial and technical assistance for investments to modernise their electricity distribution networks and institutional development resulting in improved operational efficiency in the sector and reliable supply to the consumers.

The project document reviewed by Dawn states that the main objective is to improve electricity supply and operational efficiency in targeted areas of the selected distribution companies and strengthen the capacity of power sector entities to implement reforms and improve sector governance.

It will help in the physical strengthening of distribution networks; deployment of modern equipment, technology and information systems; and provide technical assistance, studies, consultancies and management support. The proposed project will also support in undertaking power sector reforms.

Under the project, small land areas will be required primarily for the construction of a few new proposed substations. These substations will need land ranging from 4 to 6 acres and their siting can be sufficiently flexible to use a willing-buyer-willing-seller approach and to avoid/minimise acquisition of lands affected by encroachments.

Overall, the project is expected to promote socioeconomic benefits for the country and extend opportunities for further electrification of currently non-electrified areas, improvement of the quality of electricity supply, voltage improvement and reduction of outages.

According to the project document, Pakistan’s electricity sector is in crisis due to high cost of generation, dependent on imported fuels that make the sector vulnerable to changes in fuel prices and currency exchange rates. High cost of electricity supply has exacerbated cost recovery challenges for the distribution companies.

Published in Dawn, November 7th, 2021