The Asian Development Bank (ADB) said on Thursday that it had approved loans totalling $330 million to Pakistan for the country’s Second Power Transmission Strengthening Project.

The ADB press release said the project was one of the government’s “top priority investments to expand the national transmission network and enable the evacuation of low-cost renewable and hydropower to major load centres”.

The bank said a new 500 kilovolt transmission line of approximately 290 kilometres would be constructed under the project, in addition to upgrading “critical grid infrastructure” feeding Islamabad and Faisalabad.

“These investments will address long-standing constraints in Pakistan’s north–south power corridor, enabling the transfer of up to 3,200 megawatts of clean energy from hydropower plants in the north of the country. This will help reduce reliance on imported fuels, improve energy security, and support Pakistan’s transition to a more affordable and sustainable energy mix,” the ADB said.

ADB said that the initiative supported Pakistan’s broader power sector reforms and contributed to state-owned enterprise (SOE) reforms “by solidifying institutional, financial, operational, and governance improvements of the National Grid Company of Pakistan Limited (NGC) on its pathway to a modern grid operator”. It added that the NGC would serve as the executing agency for the project.

According to the press release, the ADB financing package comprises a $285m loan from the bank’s ordinary capital resources and a $45m concessional loan.

“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 press release quoted ADB Country Director for Pakistan Emma Fan as saying: “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. 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.”

The press release further stated that the Second Power Transmission Strengthening Project aligned with Pakistan’s National Power Policy (2021), Vision 2025, and Pakistan’s Nationally Determined Contributions (2021), which emphasised energy security, climate resilience, affordable clean power, and sustainable development.

“The new infrastructure will also lower technical losses, enhance grid reliability, and support the financial sustainability of the energy sector,” it said.

The ADB reaffirmed that it “continues to work with Pakistan and development partners to advance reforms, strengthen sector governance, and expand access to greener and more reliable electricity”.