This knowledge and support technical assistance (TA) will support the introduction of market mechanisms of electricity sales and purchases in Pakistan based on the competitive trading bilateral contract model (CTBCM), developed by the predecessor TA, TA8772-PAK. The introduction of competition in the electricity subsector will be the foundation of the sector's financial sustainability in the long-run through mechanisms that remain effective even through political changes. This TA is included in the Country Operations Business Plan 2019-2021.
| Project Name | Developing an Electricity Market | ||||
| Project Number | 52323-001 | ||||
| Country | Pakistan |
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| Project Status | Approved | ||||
| Project Type / Modality of Assistance | Technical Assistance |
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| Source of Funding / Amount |
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| Strategic Agendas | Inclusive economic growth |
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| Drivers of Change | Governance and capacity development Knowledge solutions Private sector development |
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| Sector / Subsector | Energy / Energy sector development and institutional reform |
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| Gender Equity and Mainstreaming | No gender elements | ||||
| Description | This knowledge and support technical assistance (TA) will support the introduction of market mechanisms of electricity sales and purchases in Pakistan based on the competitive trading bilateral contract model (CTBCM), developed by the predecessor TA, TA8772-PAK. The introduction of competition in the electricity subsector will be the foundation of the sector's financial sustainability in the long-run through mechanisms that remain effective even through political changes. This TA is included in the Country Operations Business Plan 2019-2021. | ||||
| Project Rationale and Linkage to Country/Regional Strategy | The predecessor of this TA project, TA8772 supported the government and CPPA-G to develop the concept of the market model to be adopted in Pakistan. The introduction of CTBCM will not initially create a fully competitive market. It will provide an environment for bilateral contracts between power producers and distribution companies. CPPA-G will develop a function of balancing mechanism, in which CPPA-G will determine the most efficient way to fill the gap between contracted supply and the demand. This concept went through extensive consultations with the government and the regulator, National Electric Power Regulatory Authority (NEPRA), and it is going through public consultation process led by NEPRA. The government, NEPRA and CPPA-G are working to meet the target set by the Economic Coordination Committee of the government to start the market operation from July 2021. In the long-run, the market model will need to evolve and lead to competitive processes of electricity sales and purchases. Competitive trading will also create a transparent and fair mechanism of price settlement. Establishment of such a mechanism would also keep the enforcement of market principles regardless of political developments in the country. |
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| Impact | Efficient and liquid power market design | ||||
| Project Outcome | |
|---|---|
| Description of Outcome | Competitive electricity market introduction started |
| Progress Toward Outcome | |
| Implementation Progress | |
| Description of Project Outputs | Key competitive market regulations developed Human resource capacity for implementing the new market design strengthened Coordination capacity of CPPA-G improved |
| Status of Implementation Progress (Outputs, Activities, and Issues) | |
| Geographical Location | Nation-wide |
| Summary of Environmental and Social Aspects | |
|---|---|
| Environmental Aspects | |
| Involuntary Resettlement | |
| Indigenous Peoples | |
| Stakeholder Communication, Participation, and Consultation | |
| During Project Design | |
| During Project Implementation | |
| Responsible ADB Officer | Inoue, Yuki |
| Responsible ADB Department | Central and West Asia Department |
| Responsible ADB Division | Energy Division, CWRD |
| Executing Agencies |
Central Power Purchasing Agency (Guarantee) Limited 6th Floor, Shaheed-e-Millat, Secretariat, Jinnah Avenue, Blue Area, Islamabad, Pakistan |
| Timetable | |
|---|---|
| Concept Clearance | 13 Nov 2018 |
| Fact Finding | - |
| MRM | - |
| Approval | 10 Dec 2018 |
| Last Review Mission | - |
| Last PDS Update | 10 Dec 2018 |
TA 9672-PAK
| Financing Plan/TA Utilization | Cumulative Disbursements | |||||||
|---|---|---|---|---|---|---|---|---|
| ADB | Cofinancing | Counterpart | Total | Date | Amount | |||
| Gov | Beneficiaries | Project Sponsor | Others | |||||
| 700,000.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 700,000.00 | - | 0.00 |
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