The Government of Pakistan has officially requested an extension to complete the National Transmission Modernization-I (NTM-I) project, valued at $425 million, financed by the World Bank.
This request comes in the wake of delays experienced in procurement and land compensation activities critical to the project’s progression.
This proposed restructuring represents the second such adjustment for the NTM-I project.
The initial restructuring occurred in October 2023, introducing a new withdrawal category in the Financing Agreement. This change facilitated the capitalization of both Commitment Charges (CC) and Interest During Construction (IDC).
According to the World Bank’s official documents, Pakistan’s government has sought a 35-month extension.
This period aims to cover all ongoing contracts and the Islamabad West Substation (IWS) works, which have a 30-month completion timeline. The World Bank management has consented to process this extension in two phases, starting with an initial 15-month period.
The restructuring includes a proposal to extend the closing date of the International Bank for Reconstruction and Development (IBRD) loan to April 30, 2025. This extension is intended to allow the finalization of current contracts.
A subsequent extension will be considered, dependent on the progress of the IWS package and the completion of land compensation payments.
The NTM-I project, approved in December 2017, focuses on three main components: the expansion and upgrade of Pakistan’s transmission network (Component A), the implementation of an Enterprise Resource Planning System (ERP) for the National Transmission & Despatch Company (NTDC) (Component B), and providing technical assistance for strengthening NTDC’s operational and maintenance capabilities (Component C).
To date, only $79 million of the total $425 million loan has been disbursed. The project’s development objective is currently rated as “moderately satisfactory”, while its implementation progress is deemed “moderately unsatisfactory” due to procurement and land compensation delays.
However, safeguard and fiduciary ratings are assessed as “moderately satisfactory”.
Recent months have seen improved implementation progress, particularly with the Islamabad West Substation package, which is the largest under the project and is close to being awarded. Disbursements from the project have also shown improvement.
In terms of the project components, the NTDC is close to issuing an award notification for the IWS package under Component A. While land compensation payments for IWS were progressing, there has been a recent slowdown, with 77 percent of the Resettlement Action Plan (RAP) payments completed. Other contracts under Component A are progressing well.
For Component B, the ERP program’s implementation is advancing satisfactorily, especially regarding the data center. Lastly, under Component C, a comprehensive system study on NTDC’s power system is in its final stages, and a detailed capacity building plan is under review by the bank.
Â
