The World Bank has approved $390m additional financing for Tarbela fourth extension hydropower project in Pakistan, to ensure sustainable enhancement of the country's electricity generation capacity.
The extension project would generate about 1.4GW of renewable and low cost electricity during the high-demand summer season.
The new loan will be used to install a power house at the existing Tunnel Five which can increase Tarbela’s total capacity to 6.2GW.
The construction of power house on Tunnel Five would be carried out in parallel to the ongoing work on Tunnel Four.
Under the project, a 50km long transmission line will also be laid for carrying the additional electricity produced at Tarbela to the national grid.
World Bank country director for Pakistan Illango Patchamuthu said: “Increased supply at competitive prices from Tunnel Five will support economic growth for all enterprises that use electricity, regardless of size or sector.
“In addition to reducing load shedding, it will also contribute to long term energy security.”
The World Bank had earlier approved $840m for the project. Tarbela Fourth Extension is the first World Bank supported project in South Asia to be jointly financed with the Asian Infrastructure Investment Bank (AIIB), which would be providing $300m.
The project will be financed from the International Bank for Reconstruction and Development , with a variable spread and 20 years maturity including a 6-year grace period.
Project task team leader Masood Ahmad said: “In addition to maximizing the use of existing facilities and meeting the power needs of the country, the project will also introduce a pilot floating solar power plant over a part of the reservoir area.
“The successful completion of the pilot and its possible expansion over the rest of the reservoir surface area could lead to an additional generation capacity of 5,000 MW of solar power.”