ISLAMABAD: Chief Minister Khyber Pakhtunkhwa Sohail Afridi has urged the federal government to immediately release Rs71.4 billion in outstanding Net Hydel Profit (NHP) payments, warning that continued delays are undermining the province’s financial stability, officials in the Ministry of Water Resources told Business Recorder.
In separate letters to Minister for Water Resources Moeen Wattoo and Minister for Power Sardar Awais Ahmad Khan Leghari, the chief minister sought their personal intervention to resolve the long-pending issue of unpaid NHP arrears. He emphasised that Khyber Pakhtunkhwa is constitutionally entitled to receive NHP under Article 161(2) of the 1973 Constitution, which requires the federal government to transfer net profits earned from hydropower generation to the province hosting such facilities.
Khyber Pakhtunkhwa contributes more than 60 percent of Wapda’s total hydropower generation capacity and has long served as the backbone of the national hydropower system. However, persistent delays in NHP payments have severely constrained the province’s fiscal space and its ability to finance development projects.
According to the chief minister, total outstanding NHP arrears amount to Rs71.410bn. Of this, only Rs18bn has been released, leaving an unpaid balance of Rs53.410bn. In addition, the current fiscal year’s (2025–26) budgeted NHP allocation of Rs34.580bn has yet to be disbursed. He called for the immediate release of both the arrears and the current year’s allocation to stabilise provincial finances.
The chief minister also urged the federal government to work with the province to establish a transparent and predictable NHP payment mechanism in line with the 2016 memorandum of understanding, to prevent the accumulation of future arrears. “Timely release of NHP funds is essential to fulfil constitutional obligations and past CCI approvals,” he said.
Last month, Wapda requested the Central Power Purchasing Agency–Guaranteed (CPPA-G) to release Rs17bn per month for onward payment of NHP to Khyber Pakhtunkhwa and Punjab. Wapda officials said hydroelectric receivables had reached Rs232.954bn as of October 31, 2025, including Rs108.814bn in NHP payables to provinces—Rs64.550bn for Khyber Pakhtunkhwa and Rs44.264bn for Punjab.
Wapda noted that CPPA-G is currently clearing only December 2024 hydropower invoices, leaving a 10-month billing backlog and no payments against hydroelectric arrears. Despite irregular releases, Wapda said it paid Rs36bn in NHP to Khyber Pakhtunkhwa during FY2024–25 but warned that current monthly inflows are insufficient to meet provincial payments alongside operational, development and debt-servicing needs.
The authority has again urged CPPA-G to increase monthly releases to Rs17bn and clear overdue hydroelectric receivables. Separately, the Khyber Pakhtunkhwa government has sought the prime minister’s intervention for an “out-of-the-box” solution to resolve the long-standing NHP dispute between Wapda and the provinces.
Story by Mushtaq Ghumman
