The World Bank is set to restructure the Tarbela Fourth Extension Hydropower Project (T4HP) to extend the closing date of the International Bank for Reconstruction and Development (IBRD) loan of $390 million, which finances the Tarbela Fifth Extension Hydropower Project (T5HP), to September 30, 2027. Official documents reveal that the project’s results framework has been updated to incorporate indicators from the World Bank Group’s Corporate Scorecard approach.
The Tarbela Fourth Extension Hydropower Project includes:
- IBRD Loan-81440: $400 million, fully disbursed and closed.
- IDA Credit-50790: SDR 179 million, fully disbursed and closed. Approved by the bank on March 20, 2012, these funds financed the 1,410 megawatt (MW) T4HP in Tunnel 4 of the Tarbela Dam. The T4HP was commissioned in 2018.
The Tarbela Fifth Extension Hydropower Project includes:
- IBRD Loan-86460: $390 million, approved on September 20, 2016.
- AIIB Loan LN 0005-PAK: $300 million in co-financing from the Asian Infrastructure Investment Bank (AIIB), approved on September 27, 2016.
T5HP aims to expand the Tarbela hydropower facility with a 1530 MW plant in Tunnel 5, a 500 kilovolt (kV) switchyard, and a 500 kV transmission line from the switchyard to Islamabad West Substation (IWS). It also includes social and environmental management plans, project and construction management, technical assistance, future project preparation, and a pilot floating solar plant in the Tarbela reservoir.
The project’s progress towards achieving its development objectives—”to facilitate a sustainable expansion of Pakistan’s electricity generation capacity”—is moderately satisfactory. The current loan closing date of May 31, 2024, cannot meet the project objectives, prompting the extension to September 30, 2027. The completion of T5HP and the transmission line (T5TL) is anticipated by this new date.
The project’s overall implementation progress is moderately satisfactory. Environmental and social performance, financial management, and project management are all rated satisfactory. All major procurement is completed, though the procurement rating is moderately satisfactory due to incomplete records in the Systematic Tracking of Exchanges in Procurement (STEP) system.
Key contracts for civil works and electro-mechanical (E&M) works in T5HP are under implementation. The E&M contractor has performed satisfactorily, with key equipment and parts expected to be shipped by the first half of 2025. However, the civil works contractor is behind schedule. The demolition of Tunnel 5 at the connection point with the raised intake is a critical path. Delays in completing the connecting shaft, a complex construction challenge, will impact the commissioning dates of the generation units. Nonetheless, this delay does not affect the final construction milestone, with the raised intake expected to be completed by May 2027.
The T5TL contract is under implementation, and construction progress has improved after initial delays. The National Transmission and Despatch Company (NTDC), the implementing agency for T5TL, is closely monitoring the contractor’s progress. T5TL connects with IWS, financed by the Bank through the National Transmission Modernization I Project. The T5TL contract also includes an interconnection between the T5HP switchyard and the switchyards of power plants in Tunnels 1-4. Thus, if IWS completion is delayed, power from T5HP can be evacuated through this interconnection in the short term.
A Resettlement Action Plan (RAP) is being implemented for T5TL. NTDC is compensating landowners affected by transmission towers and will compensate individuals affected by transmission line rights-of-way and related works in due time, adhering to the RAP.
There is a recent disagreement on commercial aspects of the Construction Supervision Consultant (CSC) contract, which may slow implementation progress. The Water and Power Development Authority (WAPDA) is taking remedial measures to ensure construction progress is not impeded while resolving these disagreements.
The extension of the IBRD loan closing date is crucial to complete T5HP. Previous delays caused by delayed CSC selection, additional geological investigations, COVID-19 restrictions, and access issues to Tunnel 5 have been addressed. Key contracts for civil and E&M works are underway, and the schedules support the project’s completion by the extended closing date. The disbursement forecast has been revised based on expected construction progress.
