ISLAMABAD: The Asian Development Bank (ADB) has canceled a USD 0.6 million (PKR 166.9 million) grant for the development of a gas storage system in Pakistan.
Sources reveal that the Energy Division failed to meet technical assistance targets from January 2022 to December 2023, leading to the cancellation of the $0.6 million gas storage development scheme in Pakistan by ADB.
The document states that ADB approved knowledge and technical assistance (TA) for gas storage development systems on December 16, 2021.
The objective of the TA was to analyze and recommend methods and options for gas storage across Pakistan considering safety, reliability, cost and impact on equipment as primary factors.
It also sought to design a policy, legal and regulatory framework that would adhere to international best practices for the development, operation and maintenance of gas storage facilities.
In addition, TA was to provide advisory services on the transaction model, financial structure and development plan for the country’s inaugural gas storage facility.
The estimated cost of the TA was $600,000, funded through a grant from the ADB Special Technical Assistance Fund ($300,000 from TASF 7 and $300,000 from other TASF sources).
TA outputs were assessed based on safety, reliability, cost and equipment impact, leading to the development of gas storage infrastructure across Pakistan.
Furthermore, a legal, political and regulatory framework was created for the construction, operation and maintenance of gas storage facilities.
Transaction advisory services were also developed for the optimal project capital structure and financial closure plan.
The expected result of the TA was a strengthened gas supply chain meeting the requirements for strategic reserves.
Originally planned for implementation over a 24-month period from January 2022 to December 2023, the TA designated ADB as the implementing agency, with ADB’s Central and Western Asia Division in collaboration with the Ministry of Energy (Petroleum Division) as the implementing authority. agency.
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After the effectiveness of the TA in February 2022, the recruitment of a consulting firm entrusted with carrying out a study of gas storage systems has begun.
However, the process was subsequently suspended after the implementation of technical assistance was suspended in March 2023.
TA activities were stopped in March 2023 due to Pakistan’s financial and economic problems. TA activities and targeted outputs were considered non-essential due to changes in priorities.
Due to the prevailing uncertainties and challenging situations in the country, it was decided not to extend the TP and to conclude it at the original completion date.
Since no consulting firm was involved, no payment was made from TA, according to the document.
