In 2006, the Asian Development Bank (ADB) approved a 10-year, $800 million multitranche financing facility (MFF) to support an investment program that aimed to assist Pakistan in overcoming the capacity constraints in its power transmission system. These constraints were manifest in the inability of the system to deliver peak generation output to distant load centers, resulting in power shortages and customer disconnections. The investment program was based on the country’s Transmission Sector Road Map, 2007–2017 which, following load flow studies, specified the location and details of system renovation and expansion.
Financed by the first of four tranches of the MFF, this project comprised at appraisal of 19 subprojects, each aiming to remove a transmission bottleneck through the installation of a new transformer or transmission line, or the replacement of an existing transformer with one with a larger capacity. However, as it required much more time for technical due diligence, a static VAR compensator (SVC) subproject was deferred for tranche 2. Two subprojects, financed in part by the loan savings from the removal from tranche 1 of the SVC subproject, were subsequently added, raising the total number of tranche 1 subprojects to 20.
Completion of the subprojects provided an additional transmission capacity equivalent to 9% of the total installed capacity in June 2013 and comprising almost 50% of newly installed capacity in 2007-2013. However, because the project did not have a design and monitoring framework (DMF) of its own, the outcome and impact of the completed subprojects cannot be fully established. Using the DMF of the entire MFF, the project completion report (PCR) mission established that the project did succeed in achieving only 1 of 4 MFF planned outcomes ─ the provision of additional power supply which, for the entire MFF equated to around 2,000 gigawatt-hours (GWh) per year in 2006-2016, well beyond the appraisal target of 10.5 GWh. Project accomplishments in the other MFF planned outcomes cannot be assessed.
While the project started smoothly, with most of the contracts for goods awarded within the first year, it took 5.5 years following approval to have 80% of the project’s original scope commissioned. The tremendous delay in the procurement of works contracts were due to a host of factors, including the time required to establish the project management unit (PMU), security concerns, right-of-way issues, commercial issues with contractors, delayed approval of equipment and design, and more. Overall project delays, including those brought about by changes in scope and 1 subproject site, caused a 3.5-year extension of the project loan implementation.
Despite delays and lack of clarity in achieving higher-level planned outcomes and impact, the PCR mission rated the project successful. Financed by 2 loans, one for works (Loan 2289) and another for consultancy support (Loan 2290), the actual total project cost was 35% less than the baseline appraisal estimate. 43% of the approved $223 million amount for Loan 2289 was cancelled during implementation.
The National Transmission and Despatch Company (NTDC), a state-owned corporation, was both the project executing agency (EA) and implementing agency.
