ISLAMABAD: Pakistan and Germany on Monday reaffirmed their cooperation on a €7 million ($7.56 million) program to digitize the South Asian nation’s power distribution network, part of wider efforts to modernize the energy sector and accelerate its transition toward cleaner and more reliable electricity.

The “Decarbonization and Digitalization of the Power Distribution Network” initiative, which was launched last year and will run until the end of 2026, is being implemented as technical assistance by the German development agency GIZ for Pakistan’s ministry of energy. 

The program aims to overhaul the country’s outdated grid by introducing digital technologies, integrating renewable energy, enhancing the capacity of sector officials and launching pilot projects to test new approaches.

“Our goal is not only to overcome current challenges but also to lay the foundation for a sustainable, transparent, and modern energy system,” Federal Minister for Energy Sardar Awais Ahmed Khan Leghari was quoted as saying in a statement after he met with a delegation from GIZ. 

“For this purpose, a comprehensive research and development plan is also being prepared so that future energy policy is aligned with modern requirements and technologies.”

According to the statement, the GIZ delegation informed the minister that the €7 million grant program would digitize the power distribution system, launch pilot projects and enhance the capacity of officials in the energy sector.

Its four main components include “regulatory support, integration of renewable energy, implementation of pilot projects, and the exchange of knowledge and expertise.”

The delegation also announced that an additional grant of €2.5 million ($2.7 million) had been approved for a Battery Energy Storage System (BESS), under which a pilot project and business model would be developed in collaboration with the energy ministry. 

Work is already underway to digitize two power distribution feeders operated by Peshawar Electric Supply Company (PESCO) in Pakistan’s northwest and the Lahore Electric Supply Company (LESCO) in the east, as part of the initiative.

Leghari said modernizing the energy sector was essential to Pakistan’s development:

“Through digitization, a green energy transition, and research and development, Pakistan can achieve its sustainable development goals in the energy sector.”