WASHINGTON, July 09, 2026 – In a significant move to stabilize Pakistan’s power infrastructure, the World Bank has greenlit a US$375.9 million loan dedicated to the Grid Stability Enhancement Project. This initiative, which is the inaugural phase of a decade-long program, aims to revamp Pakistan’s electricity transmission network as part of the Boosting Energy Security through Transmission in Pakistan (BEST-PAK) Multiphase Programmatic Approach (MPA).
“Pakistan’s energy challenges are deeply interconnected with its broader economic stability,” remarked Bolormaa Amgaabazar, World Bank Country Director for Pakistan. “By investing in advanced technologies for more resilient transmission infrastructure, this project will contribute to reducing electricity costs, bring more renewable energy onto the grid, and lay the groundwork for a power sector that works better for households, businesses and industries, as well as overall Pakistan’s economy.”
Frequent power outages and high electricity costs have long plagued Pakistan due to grid instabilities and transmission bottlenecks. The project will address these issues by implementing advanced technologies, such as Static Synchronous Compensators (STATCOMs) at three major 500 kV substations and installing fixed reactors and capacitor banks across 26 grid substations. These enhancements are set to incorporate 640 MW of previously curtailed wind energy into the grid, optimizing the use of southern Pakistan’s wind capacity.
Moreover, the project plans to integrate approximately 491 MW from upcoming private-sector renewable energy projects. These efforts are aligned with Pakistan’s objective to achieve a 60 percent renewable energy mix by 2030, as outlined in its Nationally Determined Contribution under the Paris Agreement. The project is anticipated to prevent around 832,500 tons of CO₂ emissions annually, cumulating to over 20.8 million tons over 25 years.
“A reliable and modern transmission grid is essential for Pakistan’s energy future,” stated Waleed Saleh Alsuraih, Lead Energy Specialist for the World Bank’s BEST‑PAK program in Pakistan. “As the first phase of the BEST-PAK program, it unlocks a pathway to large-scale clean energy deployment, stronger energy security, and a modern, commercially oriented transmission sector through targeted infrastructure investments and institutional reforms, creating the conditions for future private capital participation.”
The project also supports ongoing reforms in Pakistan’s transmission sector, focusing on restructuring the National Transmission & Dispatch Company (NTDC) into specialized entities. By incorporating international best practices suited to Pakistan’s context, the initiative aims to enhance governance, accountability, and operational performance, ensuring the power sector’s long-term sustainability.
Given Pakistan’s susceptibility to climate-related risks, including flooding and extreme heat, the project incorporates climate-resilient designs. This includes elevating installations to mitigate flood risks and ensuring equipment can withstand temperatures up to 55°C, thereby enhancing reliability during monsoons and heatwaves.
The World Bank Group in Pakistan
Pakistan has been affiliated with the World Bank since 1950, receiving over $51.2 billion in aid. The current portfolio includes 52 operations, with a total commitment of approximately $16.9 billion. The International Finance Corporation (IFC) has also played a vital role, investing around $22 billion in diverse projects across various sectors, including renewable energy and infrastructure development. As of May 15, 2026, IFC’s commitments amount to US$1.6 billion across 56 projects.
For more information, read the Pakistan Country Partnership Framework 2026-35 document
Original Story at www.worldbank.org