ISLAMABAD, Pakistan, October 9, 2007.
Pakistan will receive a loan of US$510 million to develop renewable
energies, as one of the first programs under a new initiative of the Asian
Development Bank.
The multi-tranche loan is the first of its kind in Pakistan, and the first
project will finance a set of small hydroelectric plants in Northwest
Frontier Province and Punjab. The two provincial governments will borrow
$180 million and $150 million, respectively, to fund renewable energy
projects.
The program will expand Pakistan’s power supply, especially in rural areas,
to serve 4.8 million people, while improving reliability and quality of
supply. Other provinces can request funding for renewable energy projects to
a total of $170 million.
“Small to medium-sized hydropower plants offer the greatest renewable energy
potential for Pakistan, while possibilities also exist in promoting greater
use of wind, solar, and biomass power,” explains ADB country director Peter
Fedon. “Investment in such renewable energy options would not only be
beneficial to Pakistan’s energy security, but would boost social equity,
lead to a cleaner environment, and make good economic sense.”
Pakistan’s demand for electricity is expected to reach 162,590 MW by 2030,
compared with 15,000 MW in 2005. The country’s energy supplies are highly
dependent on oil imports and, while coal, oil and gas are expected to meet
much of future demand, “there is enormous scope for more
environment-friendly options,” notes the ADB report.
Renewable energy contributes only 180 MW of present power output. Under its
clean energy and efficiency initiative, ADB will expand operations in
developing countries to $1 billion per year.
The Alternative Energy Development Board is the executing agency for the
Renewable Energy Development Sector Investment Program at the federal level.
The REDSIP was formerly called the Renewable Energy Development Facility.
Pakistan has received other funding from ADB in recent years to promote
renewables, including $550,000 under the Japan Special Fund, $800,000 under
the Technical Assistance Special Fund, and $365 million under three projects
of the Renewable Energy Development Sector Investment Program.
ADB is based in Manila and was owned by 67 members, of which 48 are from the
Asian region. Last year, it approved loans and grants for projects worth
$8.5 billion, and technical assistance amounting to $242 million.
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