42051-023: Energy Efficiency Investment Program - Tranche 1 | Asian Development Bank

Pakistan: Energy Efficiency Investment Program - Tranche 1

Sovereign (Public) Project | 42051-023 Status: Active

ADB is supporting priority energy efficiency projects in Pakistan to strengthen its energy security and reduce reliance on fossil fuels. The first project under the program includes a consumer awareness campaign on energy-efficient lighting products and replacement of incandescent light bulbs with more efficient and cost-effective compact fluorescent lamps.

Project Details

Project Officer
Inoue, Yuki Central and West Asia Department Request for information
  • Pakistan
  • Loan
  • Energy
Project Name Energy Efficiency Investment Program - Tranche 1
Project Number 42051-023
Country Pakistan
Project Status Active
Project Type / Modality of Assistance Loan
Source of Funding / Amount
Loan 2552-PAK: MFF - Energy Efficiency Investment Program - Project 1 formerly MFF- Sustainable Energy Efficiency Investment (PFR 1)
Ordinary capital resources US$ 30.00 million
Loan 2553-PAK: MFF - Energy Efficiency Investment Program - Project 1 formerly MFF- Sustainable Energy Efficiency Investment (PFR 1)
concessional ordinary capital resources lending / Asian Development Fund US$ 20.00 million
Loan 8246-PAK: MFF - Energy Efficiency Investment Program - Project 1 formerly MFF- Sustainable Energy Efficiency Investment (PFR 1)
Agence Francaise de Developpement US$ 25.00 million
Strategic Agendas Environmentally sustainable growth
Inclusive economic growth
Drivers of Change Gender Equity and Mainstreaming
Governance and capacity development
Private sector development
Sector / Subsector

Energy / Energy efficiency and conservation

Gender Equity and Mainstreaming Some gender elements

On 13 August 2009, the Government of Pakistan entered into a Framework Financing Agreement with ADB to implement MFF 0031. On 22 September 2009, ADB approved financing for up to $780 million for MFF 0031, and up to $85 million for Tranche 1. Tranche 1 includes the National Compact Fluorescent Lamp (CFL) Project under Loans 2552 and 8246, and the Investment Program Management Support Project under Loan 2553. Loan 8246 was declared effective on 9 July 2010, and Loans 2552 and 2553 were declared effective on 30 August 2010.

The National CFL Project will replace about 30 million incandescent bulbs in the residential sector with efficient, high-quality CFLs. ADB approved financing of up to $40 million from its ordinary capital resources (Loan 2552), and $25 million equivalent from Agence Francaise de Developpment (AFD, Loan 8246) for the bulk procurement and public awareness campaign for door-to-door CFL delivery to registered household customers in their license areas. The Government is contributing $20 million. In August 2014, $10 million under Loan 2552 were cancelled as surplus loan proceeds.

The Investment Program Implementation and Management Support Project will help the Government manage the Investment Program, and execute projects under each tranche. It will help with policy and institutional reform, safeguard management, gender mainstreaming, financing controls, monitoring, evaluation, results reporting, and design and due diligence for future tranches. ADB approved financing of up to $20 million from ADB's Special Funds resources (Loan 2553). The Government is contributing $5 million.

Project Rationale and Linkage to Country/Regional Strategy

The energy gap is now one of Pakistan's most serious binding constraints to growth and jobs. It results from the rapid increase in demand and high wastage of energy, and is one of the main causes of the current economic crisis. Pakistan's dependency on oil imports results from the suboptimal energy supply mix that is a consequence of poor planning. The economy is susceptible to fuel price volatility.

Pakistan uses 15% more energy than India and 25% more than the Philippines (for each dollar of gross domestic product). Energy wastage is a high cost to the economy, businesses, and consumers; its reduction requires major and immediate shifts in policies, investment, and consumption patterns.

In 2009, the power deficit reached 5,000 megawatts (MW), and natural gas supply to industries was cut during the 4 winter months. People and businesses in many parts of Pakistan are experiencing power outages and rationing lasting more than 12 hours a day. Factory closures are causing social unrest.

Energy efficiency represents the least-cost and quickest low-carbon solution to bridge the energy gap. It cuts the high dependence on oil imports and avoids investment in expensive and inefficient rental power generation based on fossil fuels. It ultimately strengthens energy security, contributes to the environment, creates jobs, and improves industrial competitiveness. Energy efficiency is now a strategic priority for the Government.

Pakistan's total energy savings potential, through the application of clean and efficient technology, is estimated at 11.16 million tons of oil equivalent (493,304 terajoules [TJ]), or 18% of primary energy use (FY 2008). This corresponds to a 51% reduction in net oil imports. In FY 2008, the oil import bill was $12 billion. Savings in electricity and gas resulting from well thought out energy efficiency investments correspond to additional generation capacity of about 6,770 MW.

Energy efficiency investments can be most effective when the policy, regulatory, and pricing regime is right. Energy tariffs have historically been low in Pakistan. As such, customers have not had much of an incentive to invest in efficient technology, nor shift consumption patterns. While electricity production costs tripled from FY 2003 to FY2007, tariffs were not adjusted to cover this increase. Since FY 2007, tariffs increased by an average of 20% and will continue doing so until reaching cost-recovery by FY 2011. As tariffs increase, so does awareness of energy efficiency and incentives to acquire new, less energy-consuming technology.

Impact Energy efficiency promoted in Pakistan
Project Outcome
Description of Outcome Inefficient, substandard incandescent bulbs phased out of the market
Progress Toward Outcome As of Feb 2017, 93% of the 30 million CFLs were distributed to the households. The remaining CFLs are being distributed under the CFL distribution contingency plan in the RRP.
Implementation Progress
Description of Project Outputs

Electricity peak demand reduced by 1,094 MW

A national energy efficiency standards, testing, certification, and labeling regime created

Increased customer awareness of energy efficient lighting products

Energy efficiency and climate change mainstreamed in national development strategy

Status of Implementation Progress (Outputs, Activities, and Issues)



Target revised to 2019 which is beyond Loan 2553's closing date. Procurement to commence after the new PMO is on board, with assistance from a consultant. Loan extension will be requested to end of MFF period (Sep 2019).



Energy savings total 2,119 GWh as of 30 June 2014.

Ongoing. Original target date moved to 2017 due to delayed procurement, pre-shipment CFL inspections, and CFL media campaign; and unavailability of incandescent lamps to be replaced. As of 6 Feb 2017, 93% of CFLs distributed to households. Full distribution targeted by July 2017.


Geographical Location Nation-wide
Safeguard Categories
Environment B
Involuntary Resettlement C
Indigenous Peoples C
Summary of Environmental and Social Aspects
Environmental Aspects Based on the IEE (Supplementary Appendix I of the RRP), the National CFL Project (Loan 2552/L8246) is Category B. A key environmental risk is lamp waste accumulation. To avoid this risk, the Program Management Support Project (Loan 2553) provides for a lamp waste management facility. In general, there are no potential significant adverse environmental impacts that warrant specific environmental monitoring.
Involuntary Resettlement The Tranche 1 projects neither entail land acquisition nor economic or physical resettlement.
Indigenous Peoples The Tranche 1 projects will not affect indigenous peoples.
Stakeholder Communication, Participation, and Consultation
During Project Design

To support the investment program preparation and the Roadmap preparation, the Government established the Energy Efficiency and Conservation Consultative Group (EECCG) chaired by the Planning Commission and comprising Secretaries of EAD, Ministries of Finance, Water and Power, Petroleum and Natural Resources, Environment, Industries, the National Energy Conservation Center, PEPCO, power and gas utilities, Pakistan Standards and Quality Control Authority, Hydrocarbon Development Institute, Pakistan Council for Industrial and Scientific Research, and development partners. EECCG provided strategic guidance into the program design and later in implementation to ensure the effectiveness and sustainability of the project's outcome.

The Pakistan EEIP Baseline Domestic Lighting Survey was conducted to support the design of the National CFL Project. The survey aimed to determine the existing patterns of lighting device use and lighting habits across different electricity consumption tiers in the residential sector of the country, and to ensure the eligibility of the program for Clean Development Mechanism. The survey involved 3,253 domestic customers in 58 major areas (districts, tehsils, 53 town committees, and cities) across the eight distribution companies (DISCOs), and the Karachi Electric Supply Company (KESC). The survey sample was distributed using pro-rated domestic customer distribution patterns of the nine utilities across each electricity consumption tier. The details on the survey methodology and results are in the PPTA Consultants' Final Report.

During Project Implementation EECCG will continue its strategic guidance role. The Ministry of Water and Power and PMU are coordinating with other stakeholders during implementation.
Business Opportunities
Consulting Services International and national consultants to be recruited following ADB's Guidelines on the Use of Consultants, using the quality- and cost-based selection method. The consultants would (i) manage the Investment Program, (ii) conduct feasibility studies for subsequent tranches, (iii) help with implementation and M&E for the National CFL Project, (iv) help comply with post-PDD CDM requirements, (v) support capacity development, and (vi) support the establishment of a lamp waste management facility. Three individual consultants (Energy Efficiency Expert, Auditor/Validator, and Logistics Expert) were engaged to help implement the National CFL Project.
Procurement Goods and works to be procured following ADB's Procurement Guidelines, and in consultation with Agence Francaise Developpment (for contracts jointly financed by AFD). The CFLs were procured through ICB (goods) using ADB's one-stage, one-envelope bidding procedure. The CFL communication campaign was procured through NCB (goods). The lamp waste management facility will be procured through ICB (design, supply, and install). Shopping will be used to purchase goods less than $100,000.
Responsible ADB Officer Inoue, Yuki
Responsible ADB Department Central and West Asia Department
Responsible ADB Division Energy Division, CWRD
Executing Agencies
Ministry of Water & Power
Mr. Shahid Rafi
[email protected]
A Block, Pak Sectt. Islamabad
Planning Commission
Infrastructure Wing
Concept Clearance 27 Apr 2009
Fact Finding 28 Apr 2009 to 15 May 2009
MRM 08 Jun 2009
Approval 30 Sep 2009
Last Review Mission -
PDS Creation Date 26 Nov 2009
Last PDS Update 28 Sep 2017

Loan 2552-PAK

Approval Signing Date Effectivity Date Closing
Original Revised Actual
22 Sep 2009 29 Apr 2010 30 Aug 2010 31 Jul 2012 30 Jun 2014 05 May 2015
Financing Plan Loan Utilization
Total (Amount in US$ million) Date ADB Others Net Percentage
Project Cost 55.00 Cumulative Contract Awards
ADB 30.00 22 Sep 2009 26.77 0.00 99%
Counterpart 25.00 Cumulative Disbursements
Cofinancing 0.00 22 Sep 2009 27.02 0.00 100%

Loan 2553-PAK

Approval Signing Date Effectivity Date Closing
Original Revised Actual
22 Sep 2009 29 Apr 2010 30 Aug 2010 31 Mar 2017 16 Sep 2019 -
Financing Plan Loan Utilization
Total (Amount in US$ million) Date ADB Others Net Percentage
Project Cost 20.00 Cumulative Contract Awards
ADB 20.00 22 Sep 2009 1.32 0.00 7%
Counterpart 0.00 Cumulative Disbursements
Cofinancing 0.00 22 Sep 2009 0.81 0.00 4%

Loan 8246-PAK

Approval Signing Date Effectivity Date Closing
Original Revised Actual
30 Sep 2009 09 Jul 2010 09 Jul 2010 31 Dec 2014 - 01 Jun 2015
Financing Plan Loan Utilization
Total (Amount in US$ million) Date ADB Others Net Percentage
Project Cost 25.00 Cumulative Contract Awards
ADB 0.00 30 Sep 2009 0.00 16.57 100%
Counterpart 0.00 Cumulative Disbursements
Cofinancing 25.00 30 Sep 2009 0.00 16.57 100%

Project Data Sheets (PDS) contain summary information on the project or program. Because the PDS is a work in progress, some information may not be included in its initial version but will be added as it becomes available. Information about proposed projects is tentative and indicative.

The Public Communications Policy (PCP) recognizes that transparency and accountability are essential to development effectiveness. It establishes the disclosure requirements for documents and information ADB produces or requires to be produced.

The Accountability Mechanism provides a forum where people adversely affected by ADB-assisted projects can voice and seek solutions to their problems and report alleged noncompliance of ADB's operational policies and procedures.

In preparing any country program or strategy, financing any project, or by making any designation of, or reference to, a particular territory or geographic area in this document, the Asian Development Bank does not intend to make any judgments as to the legal or other status of any territory or area.

Safeguard Documents See also: Safeguards

Safeguard documents provided at the time of project/facility approval may also be found in the list of linked documents provided with the Report and Recommendation of the President.

None currently available.

Evaluation Documents See also: Independent Evaluation

None currently available.

Related Publications

None currently available.

The Public Communications Policy (PCP) establishes the disclosure requirements for documents and information ADB produces or requires to be produced in its operations to facilitate stakeholder participation in ADB's decision-making. For more information, refer to the Safeguard Policy Statement, Operations Manual F1, and Operations Manual L3.

Requests for information may also be directed to the InfoUnit.


No tenders for this project were found.

Contracts Awarded

No contracts awarded for this project were found

Procurement Plan

Title Document Type Document Date
Energy Efficiency Investment Program - Tranche 1 Procurement Plans Apr 2014