The World Bank has approved an Additional Financing (AF) of $390 million to help the sustainable expansion of Pakistan’s electricity generation capacity.
The AF, under the Tarbela Fourth Extension Hydropower Project, will add 1,410 Megawatt (MW) of environment-friendly, renewable and low-cost electricity generation during the high-demand summer season, the World Bank said in a statement issued on Wednesday.
The loan finances the installation of a powerhouse at the existing Tunnel Five that will enhance the total capacity at Tarbela to 6,298 MW.
Increased supply at competitive prices from Tunnel Five will support economic growth for all enterprises that use electricity regardless of size or sector, said Illangovan Patchamuthu, the World Bank Country Director for Pakistan.
In addition to reducing load-shedding it will also contribute to long-term energy security.
The construction of the powerhouse on Tunnel Five would proceed in parallel with the ongoing work on Tunnel Four in a manner that it would remain operational until the construction of the powerhouse on Tunnel Four is completed and the project is available for water release for irrigation purposes.
The project also includes laying off about a 50-kilometre long transmission line for carrying additional generation at Tarbela to the national grid.
In addition to maximising the use of existing facilities and meeting the power needs of the country, the project would also introduce a pilot floating solar power plant over a part of the reservoir area, said Task Team Leader of the Project,Masood Ahmad.
The successful completion of the pilot and its possible expansion over the rest of the reservoir surface area could lead to an additional generation capacity of 5,000 MW of solar power.
The project will be financed by the International Bank for Reconstruction and Development (IBRD) with a variable spread and 20 years maturity including a 6-year grace period.
This will be the first World Bank supported project in South Asia to be jointly financed by the Asian Infrastructure Investment Bank (AIIB), who would be providing $300 million.