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Govt Seeks Extension in WB Loan for Dasu Transmission Line Project

The government has sought a 13-month extension in the closing date of the World Bank loan to continue the construction of the transmission line from Dasu Hydropower Plant to Islamabad.

Official documents revealed that the Economic Affairs Division (EAD), through its letter dated December 20, 2023, requested an extension of the closing date till June 30, 2025, to continue the construction of a 765 kilo-volt (kV) transmission line from Dasu Hydropower Plant to Islamabad West Substation.

The National Transmission and Despatch Company (NTDC) implements the Transmission Component. The closing date will be extended by 13 months though this first extension of the IBRD loan. The key contracts under the transmission component have been awarded with a total amount of $654.5 million. The three key contracts are for Lot 1: Construction of Transmission (TL) from Dasu to Mansehra; Lot 2: TL from Mansehra to Islamabad Substation; and Lot 3: Mansehra Substation. $700 million available in the IBRD loan will be fully utilized in Lots 1, 2, and 3; supervision consultant; and resettlement action and social development plans under the transmission component.

Till January 15, 2024, the IBRD Loan has disbursed $103.1 million and has reserved $245.2 million as Special Commitments to facilitate the supply of equipment and parts for the three contracts. Slow procurement of the three contracts was the main reason for the delay in the implementation of the transmission component. The contracts were finally signed in December 2022. Lots 1 and 2 contracts are effective from February 10, 2023, with implementation period of 40 months. Lot 3 contract is effective from February 20, 2023, with the implementation period of 30 months.

The contractors are mobilised; design approvals are nearly complete, the transmission line route has been finalised, the contractor has been handed over to the site for Mansehra substation, and the contractors have placed orders for the key materials and parts. The progress of the overall project towards achieving the Project Development Objective is Satisfactory as the dam construction is underway with the target of commissioning the first power generation unit by fiscal year 2027.

The bank is arranging more funds for the Hydropower Component, which is implemented by the Pakistan Water and Power Development Authority (WAPDA). If contract timelines for Lots 1 and 2 are met, the transmission line will be ready for power evacuation from the 2,160 megawatt hydropower plant under the Project. A longer extension is anticipated in future to complete the construction of the transmission line. The timing and period of extension will depend on the implementation progress.

The overall project development objective is to facilitate the expansion of the electricity supply of hydro-power in Pakistan. The project would also improve access to socio-economic services for local communities in the project area and build WAPDA’s capacity to prepare future hydropower projects. This would be achieved by installing a 2,160 MW hydropower plant on the main Indus River, which can be expanded to 4,320 MW in future at very low cost. The Project is a “high-risk-high reward” operation aimed at providing low cost non-carbon renewable energy.

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