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 Type / Modality of Assistance||Technical Assistance
|Source of Funding / Amount||
|Strategic Agendas||Inclusive economic growth
|Drivers of Change||Governance and capacity development
Private sector development
|Sector / Subsector||
Energy / Energy sector development and institutional reform
|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.
|Impact||Efficient and liquid power market design|
|Description of Outcome||Competitive electricity market introduction started|
|Progress Toward Outcome||Outputs are being developed by selected consultants, and achievement of outcome indicators (approval of market development roadmap and approval of updated commercial code by NEPRA) is on track.|
|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)||
The key TA consulting firm has been working on updates since early 2019.
Updated CTBCM Implementation Roadmap was submitted by CPPA-G to NEPRA for approval. Inputs to the revision of commercial code is being provided.
TA Consultant is working with CPPA-G to develop a market simulation methodology and processes.
The CPPA-G Board of Directors has created the Market Implementation Subcommittee to monitor the implementation of the CTBCM. A consulting firm was requested to prepare an action plan for preparing the subcommittee members to be prepared to carry out their functions. Standard operating procedures for stakeholder coordination is being developed.
|Summary of Environmental and Social Aspects|
|Stakeholder Communication, Participation, and Consultation|
|During Project Design||The TA concept went through extensive consultations with the government and the regulator, National Electric Power Regulatory Authority (NEPRA). NEPRA led the related public consultation process.|
|During Project Implementation||Stakeholder consultations will be held in preparing electricity market regulations.|
ADB will engage consultants following the ADB Procurement Policy (2017, as amended from time to time) and its associated project administration instructions and/or staff instructions. It will recruit a national individual consultant through individual consultant selection to support the CPPA-G in the financial analysis of the sector, as this is a supplementary local support that does not require the engagement of a consulting firm. Recruitment of a consulting firm will be use quality- and cost-based selection with a 90:10 quality cost ratio to prioritize the quality of the consultants as the tasks require specialized knowledge of electricity market development. Any consulting position identified at a later stage will be recruited through individual consultant selection.
Contract with the consulting firm was signed on 16 May 2019, which commenced on 1 June 2019 and expected to complete by 31 May 2021.
|Procurement||No procurement of goods, supplies, or equipment is envisaged.|
|Responsible ADB Officer||Inoue, Yuki|
|Responsible ADB Department||Central and West Asia Department|
|Responsible ADB Division||Energy Division, CWRD|
|Concept Clearance||13 Nov 2018|
|Approval||07 Dec 2018|
|Last Review Mission||-|
|Last PDS Update||31 Mar 2020|
|Approval||Signing Date||Effectivity Date||Closing|
|07 Dec 2018||31 Dec 2018||31 Dec 2018||31 Jul 2021||-||-|
|Financing Plan/TA Utilization||Cumulative Disbursements|
|700,000.00||0.00||0.00||0.00||0.00||0.00||700,000.00||07 Dec 2018||413,314.10|
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 Access to Information Policy (AIP) 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.
|Title||Document Type||Document Date|
|Developing an Electricity Market: Technical Assistance Report||Technical Assistance Reports||Dec 2018|
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.
None currently available.
The Access to Information Policy (AIP) 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.
|Tender Title||Type||Status||Posting Date||Deadline|
|Developing Electricity Market in Pakistan||Firm - Consulting||Closed||07 Dec 2018||13 Jan 2019|
|Contract Title||Approval Number||Contract Date||Contractor||Contractor Address||Executing Agency||Contract Description||Total Contract Amount (US$)||Contract Amount Financed by ADB (US$)|
|Capacity Development||Technical Assistance 9672||16 May 2019||MRC Consultants and Transaction Advisers S.L. (SPAIN)||C/ General Moscardo, 32, 1A Madrid 28020, Spain||Central Power Purchasing Agency(Guarantee) Limited||Consulting Services||596,550.00||—|
None currently available.