The Asian Development Bank (ADB) has taken the decision to cancel a $0.6 million grant that was designated for the gas storage development system in Pakistan. The Energy Division, responsible for overseeing the project from January 2022 to December 2023, failed to meet the specified objectives of the Technical Assistance (TA), leading to this cancellation.
The approved knowledge and support technical assistance for Gas Storage Development Systems, sanctioned on December 16, 2021, aimed to analyze and recommend gas storage modalities and options across Pakistan, focusing on safety, reliability, cost, and impact on amenities. Additionally, it intended to propose a policy, legal, and regulatory framework for the development, operation, and maintenance of gas storage facilities based on international best practices. The TA further aimed to provide advisory services on a transaction model, financial structure, and development roadmap for the first gas storage facility in the country.
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This TA, estimated at $600,000, was financed through ADB’s Technical Assistance Special Fund ($300,000 TASF 7 and $300,000 TASF-other sources). The expected outputs included the assessment of gas storage infrastructure across Pakistan, the development of a legal and regulatory framework for gas storage facilities, and advisory services for an optimal project capital structure and financial closure roadmap. The desired outcome was to strengthen the gas supply chain and meet strategic reserves requirements. The TA was slated for implementation over 24 months from January 2022 to December 2023, with ADB designated as the executing agency and its Central and West Asia Department, through its Energy Division in collaboration with the Ministry of Energy (Petroleum Division), serving as the implementing agency.
However, challenges arose in February 2022, shortly after TA effectiveness, as the recruitment of the consulting firm for the Gas Storage Development Systems Study was initiated but subsequently paused in March 2023 when the TA implementation was put on hold. The halt in activities was attributed to Pakistan’s financial and economic challenges, rendering the TA’s activities and targeted outputs non-essential in the face of changing priorities.
Given the prevailing uncertainties and challenging situations in the country, it was decided not to extend the TA, leading to its closure on the original completion date. As no consulting firm was engaged, no disbursement was made from the TA, as outlined in the document.
