The Export Development Bank of Iran has agreed to support a US$59mn power project in Gwader in Pakistan. Following a meeting of Pakistan’s executive committee of the National Economic Council, local reports state that the Iranian development bank will be providing as much as 85% of the required financing.
The project has been set up following a agreement signed between Iran’s Power Generation, Transmission and Distribution Company and the National Transmission and Dispatch Company in February. Under the project a 100km transmission line crossing the Pakistan-Iran border to Gwader will be constructed. Pakistan imports around 39 megawatts of electricity from Iran to support the needs of its border province of Baluchistan, and this project will boost power imports by an extra 100MW.
It has been reported the project is due for completion within the next 36 months. Once up and running, the power line will provide electricity to Gwader Port, and improve the electrification of remote areas of Balochistan.
Pakistan’s power sector is in acute need of improvement and is beginning to attract investment from a wide range of sources. In June this year, the Asian Development Bank signed a US$150mn loan agreement to help increase power supply and coverage in Pakistan’s largest city of Karachi. The loan is supporting the Karachi Electric Supply Corporation’s capital investment programme, with local commercial banks, IFC and shareholders also contributing funds.
The power utility was privatised two years ago, and this investment will not only help increase electricity generation, improve the utility’s transmission and distribution network, but also ensure that public and political support of the privatisation process happening in Pakistan can continue and be expanded into other sectors.