June 09 - 15, 2008

The government has evolved a plan to produce 5,000 megawatts (MW) of electricity under the Thar Coal Power Generation Project.

Under the project, country's power generation capacity will be enhanced to 20,000 MW in the long run. The country was presently in the grip of a serious power crisis with power shortage of over 3,000 MW and this shortage was likely to go up to 4,000 MW next year.

Experts told PAGE that the Power Policy of 1994 led to an additional 3,078 MW of electricity production, which in return led to $ 3.5 billion investment. "During this year, the government has planned to install 2200 mega watt power generation units". The government has also planned to save 500 mega watt of electricity through special load management campaigns, thereby scaling down load shedding."

Moreover, Asian Development Bank (ADB) and Pakistan has signed a loan agreement of US $ 200 million for power transmission line enhancement throughout the country.

Sources in the ADB said the project was an integral part of the US $ 800 million Investment Program for Power Transmission Line Enhancement throughout Pakistan.

The project aims at augmentation, rehabilitation, and expansion of the primary power transmission system and to remove power transmission bottlenecks.

The impact of the Project will be an adequate and reliable power supply to a greater number of industrial, commercial and residential consumers.

The project comprises 10 sub projects namely (1) New 220kv Okara Grid Station with Transmission Line (2) New 220kv Toba Tek Singh Grid Station with Transmission Line (3) SVS (Static Var System) at Quetta (4) Transformer Extension at Ghazi Barotha 500kv (5) New 500kv D.G.Khan Grid Station with Transmission Line (6) New 220 KV Lora Lai Grid Station (7) New 220kv Rohri Grid Station and Line Bay Extension at Shikarpur with Transmission Line (ENGRO/FFC IPPs Power Dispersal Arrangement) (8) Jarwar - Sadiqabad 132 KV transmission line with Line Bay Extension at Sadiqabad (Power Dispersal Arrangement for Jarwar) (9) Augmentation at Ravi 220 KV (10) Tools and Construction/Testing Equipment.

Specifically, the Project will expand and augment transmission capacity, and evacuate power from existing power stations.

The sub projects will result in (i) an increase of approximately 5,800 Mega Volt-Amperes (MVA) of transformer capacity; (ii) increased security of supply to customers as compliance with security standards for planning and operation is strengthened and (iii) a more reliable primary transmission system.

This is a Multi-Tranche Financing Facility (MFF). The 1st tranche of the program of US$ 236 million was signed on January 16, 2007.

ADB has recently introduced this MFF scheme; some of its benefits are as follows:

(i) The MFF provides financial and operational flexibility to clients and ADB, and encourages the financing of operations only when these fall due and are ready for execution.

(ii) The use of the MFF binds clients to the delivery of specific warranties and representations covering safeguards, governance, capacity, sector policies and economic, social, financial, legal and technical aspects.

(iii) Under this scheme ADB provides finance over a longer-term period, covering key slices of investment programmes, and in this manner increase efficiency, productivity, critical mass, and in particular continuity to a given sector.

(iv) The MFF enables ADB and its clients to focus more on implementation issues and less on repeat processing tasks or actions.

(v) Although the MFF precludes commitment charges on amounts that are not subject to execute loan agreements, the most important advantage to the clients is the positive impact on the balance sheet. Only financing required, in a given period is converted into assets and liabilities through a loan agreement.

(vi) The MFF allows both parties to enter into a more constructive dialogue over policies, capacity issues and governance and ADB to offer a continued presence in a sector.