World Bank approves $376m to modernize Pakistan's power grid

July 10, 2026 (MLN): Pakistan has secured $375.9m in financing from the World Bank for the Grid Stability Enhancement Project, aimed at strengthening the country's national electricity transmission network under the Boosting Energy Security through Transmission in Pakistan (BEST-PAK) Multiphase Programmatic Approach (MPA).

Approved by the World Bank's Board of Executive Directors, the project marks the first phase of a 10-year program focused on modernizing Pakistan's electricity transmission system, reducing power outages, and enabling greater integration of clean energy into the national grid, according to the press release.

World Bank Country Director for Pakistan, Bolormaa Amgaabazar, said Pakistan's energy challenges are closely linked to its broader economic stability.

She said investment in advanced technologies and resilient transmission infrastructure would help lower electricity costs, increase the share of renewable energy in the grid, and improve the performance of the power sector for households, businesses, industries, and the overall economy.

According to the World Bank, Pakistan's transmission network continues to face grid instability and transmission bottlenecks that restrict the delivery of reliable electricity and prevent full utilization of clean energy generation.

These issues contribute to frequent power outages, higher electricity costs, and reduced economic opportunities.

Under the project, advanced grid-stabilizing equipment will be installed at key transmission facilities, including Static Synchronous Compensators (STATCOMs) at three major 500 kV substations, along with fixed reactors and capacitor banks across 26 grid substations.

The upgrades are expected to enable the transmission of 640 megawatts (MW) of currently curtailed wind energy, allowing the full utilization of 1,840 MW of wind generation capacity in southern Pakistan by transmitting electricity to major demand centers. The project will also facilitate the integration of around 491 MW of planned private sector-led renewable energy projects.

The World Bank said these improvements would support Pakistan's target of achieving 60% renewable energy in its electricity mix by 2030 under its Nationally Determined Contribution to the Paris Agreement. Over a 25-year period, the project is expected to avoid more than 20.8 million tons of carbon dioxide emissions, including approximately 832,500 tons annually.

Lead Energy Specialist for the World Bank's BEST-PAK program in Pakistan, Waleed Saleh Alsuraih, said a reliable and modern transmission grid is essential for Pakistan's energy future.

He said the project will pave the way for large-scale deployment of clean energy, enhanced energy security, a modern and commercially oriented transmission sector, and create conditions for future private sector investment through infrastructure improvements and institutional reforms.

The project also supports the government's transmission sector reform agenda, including the restructuring of the National Transmission & Dispatch Company (NTDC) into specialized successor entities.

According to the World Bank, the reforms are intended to improve governance, accountability, operational performance, and the long-term sustainability of the power sector by drawing on international experience tailored to Pakistan's requirements.

The World Bank noted that the project has been designed with climate resilience in mind, given Pakistan's vulnerability to flooding and extreme heat.

It said all new installations will be built to climate-resilient standards, including elevated platforms to reduce flood risks and equipment capable of operating in temperatures of up to 55°C, helping ensure reliable performance during monsoon seasons and heatwaves.

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