ISLAMABAD: The World Bank has highlighted mixed progress in Pakistan’s strategically important Dasu Hydropower Project, warning that execution challenges and macroeconomic pressures continue to pose risks despite overall implementation remaining on track.
In its latest Implementation Status and Results Report, the Bank rated overall project implementation as “moderately satisfactory,” but downgraded progress toward achieving development objectives from “satisfactory” to “moderately satisfactory.” The project retains a “high” overall risk rating due to governance issues, economic instability, and institutional capacity constraints.
The 2,160MW run-of-river project on the Indus River is a cornerstone of Pakistan’s long-term energy strategy, expected to generate around 12,225 gigawatt-hours annually upon completion. However, as of early 2026, electricity generation remains at zero, with key performance indicators — including installed capacity and output — still at baseline levels.
Construction progress presents a mixed outlook. Work on the main hydraulic structure has surpassed 29% completion, while power generation facilities stand at approximately 19%. Supporting infrastructure, including roads and relocation efforts, has advanced further but is yet to be fully completed.
A major concern flagged in the report is the lack of physical progress on the 765kV transmission line required to evacuate power from Dasu to Islamabad, despite contractor mobilization beginning in 2023 — raising the risk of bottlenecks even if generation capacity becomes operational on schedule.
The implementing agency, Water and Power Development Authority, is also facing capacity limitations, particularly in developing future hydropower projects — one of the initiative’s core objectives.
While the World Bank has committed significant financing, including a $1 billion package approved in 2024 and signed in 2025, disbursement levels remain uneven across funding instruments, indicating implementation bottlenecks.
The report further noted that macroeconomic challenges, particularly currency depreciation, are impacting project costs and complicating private sector participation, adding to overall execution risks.
On a positive note, social development indicators show progress, with over 22,000 people in the project area benefiting from improved services. Community engagement efforts, including grievance redressal and women’s participation in income-generating activities, have also advanced, though some local development initiatives remain behind schedule.
Story by Tahir Amin
