The project aims to strengthen the existing power transmission and distribution (T&D) system in Pakistan by rehabilitating infrastructure as the country is currently struggling with deteriorating and climate-vulnerable grid infrastructure. As part of the ‘Power Distribution Strengthening Project’, ADB is assisting the government of Pakistan in rehabilitating and modernizing the aging power T&D infrastructure of distribution companies (DISCOs). To ensure that the developments are climate resilient, FutureWater will conduct a detailed climate risk and adaptation (CRA) assessment for the four DISCOs. Insights from the CRA will be used to devise adaptation strategies and costs to promote climate financing.
Currently, Pakistan’s energy mix consists of 58.8% thermal, 25.8% hydel, 8.6% nuclear, and 6.8% alternative sources, reflecting efforts to diversify from fossil fuels. Pakistan’s installed electricity generation capacity reached 41,557 MW by 2022, with significant growth in transmission line length over the past 5 years. However, the T&D system has not kept pace with the nearly 15,000 MW capacity added during 2017-2021 (ADB, 2024). Despite investments, transmission and distribution losses averaged about 18% over the last 5 years, exceeding the National Electric Power Regulatory Authority’s (NEPRA) 15.3% target. In 2020, 23.7% of generated energy was lost during transmission, distribution, and delivery (ADB, 2024). Notably, transmission and distribution losses exceed 25%, far higher than in comparable countries (GoP, 2017). Therefore, there is an urgent need to upgrade the existing distribution infrastructure to fulfill the energy demands and ensure steady socioeconomic development in the country. ADB will provide financing for four underperforming DISCOs, selected in consultation with the Ministry of Energy: Sukkur Electric Power Company (SEPCO), Hyderabad Electric Supply Company (HESCO), the Multan Electric Power Company (MEPCO), and the Lahore Electric Supply Company (LESCO) to:
- to upgrade the critical infrastructure of these DISCOs to reduce technical losses.
- to implement revenue protection measures to improve collections. Additionally, the project design includes embedded climate resilience and reform measures to enhance institutional capacity and financial sustainability.
These rehabilitation efforts will also take into account and address the growing impacts of climate change in four DISCOs. FutureWater will make use of state-of-the-art downscaled Coupled Model Intercomparison Project Phase 6 (CMIP6) ensembles, and other relevant hazards and local information to develop this CRA. Insights from the CRA will be used to devise adaptation strategies. Additionally, FutureWater will be reviewing the existing meteorological monitoring network and recommending additional potential monitoring sites for improved surveillance in the country. To further assist the Government of Pakistan, in actualizing its second Nationally Determined Contribution (NDC) agenda which seeks to reduce greenhouse gas (GHG) emissions per unit of GDP by 50% (compared to the level in 2016), by the year 2030, FutureWater will also develop a GHG account and prepare a Paris Agreement alignment assessment.
