ISLAMABAD: The Asian Devel­op­m­ent Bank (ADB) on Thursday announced the approval of two loans totalling $330 million for Pakistan to build a transmission line from Islamabad to Faisalabad, the industrial hub of Punjab.

The Second Power Transmission Strengthening Project is “one of the government of Pakistan’s top priority investments to expand the national transmission network and enable the evacuation of low-cost renewable and hydropower (in the north) to major load centres,” the Manila-based lender said in a statement.

The project involves constructing a new 500kV transmission line of about 290 kilometres and upgrading critical grid infrastructure that supplies Islamabad and Faisalabad. These investments aim to ease long-standing bottlenecks in the north-south power corridor and enable the transfer of up to 3,200MW of clean energy from northern hydropower plants.

According to the ADB, the project is designed to reduce reliance on imported fuels, strengthen energy security and support Pakistan’s shift towards a more affordable and sustainable energy mix. The financing package includes a $285m loan from ordinary capital resources and a $45m concessional loan for environmental considerations.

New 500kV line to boost electricity supply to Islamabad and Faisalabad

The project forms part of wider power sector reforms and is expected to contribute to state-owned enterprise (SOE) restructuring by improving institutional, financial, operational and governance systems within the National Grid Company of Pakistan Limited (NGC), formerly the National Trans­mis­sion and Despatch Company (NTDC). NGC will implement the project.

“This financing will help NGC expand and modernise transmission assets, strengthen institutional capacity, improve financial management, and advance public outreach and gender equity initiatives,” the ADB said.

“This project represents ADB’s strong partnership with Pakistan and our shared commitment to accelerate clean energy transition and integration, and to achieve a resilient and sustainable energy sector,” ADB Country Director for Pakistan Emma Fan said. “By expanding transmission capacity and enabling the delivery of low-cost hydropower, the project aims to improve access to clean energy in the power mix, reduce system costs, and support Pakistan’s long-term and sustainable economic development,” she added.

The initiative aligns with Pakistan’s National Power Policy (2021), Vision 2025 and Nationally Determined Contributions (2021), which emphasise energy security, climate resilience, affordable clean power and sustainable development. The new infrastructure is also expected to reduce technical losses, improve grid reliability and support the financial sustainability of the energy sector.

The proposed transmission line is designed to increase the capacity, reliability and efficiency of the regional grid by facilitating the transfer of electricity from generation sources to distribution networks and end users. Rising electricity demand, driven by population growth, industrial expansion and rural electrification, has made the existing network inadequate, leading to congestion and power losses.

The new high-voltage line is intended to meet current and future needs and help address challenges linked to a strained macroeconomic environment, growing circular debt and inefficiencies in the transmission system, including high losses, weak revenue recovery, outdated infrastructure and governance shortcomings that have undermined fiscal stability and reliable power supply.

Technically, the project involves exp­a­­nding the high-voltage network in Pun­jab to complete 500kV and 220kV transmission line loops, ensuring sufficient capacity to transmit renewable energy to major load centers in the densely populated Islamabad and Faisalabad regions.

NGC’s northern network currently accommodates more than 10,000MW of hydroelectric capacity, with surplus power flowing to mid-country load centres through the 500kV system during the high-water summer months.

Published in Dawn, November 21st, 2025