By Ayomide Otitoju
Pakistan will receive a $330 million loan from the Asian Development Bank (ADB) to modernize its energy grid and deliver hydropower to major cities, the bank announced Thursday.
The South Asian nation of 250 million faces chronic power outages, rising electricity costs, and a growing circular debt in the power sector, which has reached 1.7 trillion rupees ($5.9 billion), according to government data.
“These investments will address long-standing constraints in Pakistan’s north–south power corridor, enabling the transfer of up to 3,200 megawatts of clean energy from hydropower plants in the north,” the ADB said in a statement.
Pakistan’s aging power infrastructure suffers from inefficiencies, with significant energy losses during transmission and widespread theft. The ADB said the loan would reduce reliance on imported fuels, enhance energy security, and support Pakistan’s shift toward a more sustainable and affordable energy mix.
“This project represents ADB’s strong partnership with Pakistan and our shared commitment to accelerate clean energy transition,” said Emma Fan, ADB’s Pakistan director.
The loan follows a $250 million ADB package in November 2023 to expand the high-voltage transmission network in Punjab and Khyber Pakhtunkhwa, and a $410 million approval in August to develop the Reko Diq copper and gold mine.
Pakistan, which narrowly avoided default in 2023 amid a political and economic crisis, relies heavily on external borrowing. A $7 billion IMF bailout helped unlock additional loans from allied nations, preventing a potential economic collapse.
