ISLAMABAD: The World Bank has rated progress towards the development objectives of the $727 million Khyber Pakhtunkhwa Hydropower and Renewable Energy Development Project as “moderately unsatisfactory”, citing substantial risks to its implementation.
Thank you for reading this post, don't forget to subscribe!In its latest assessment, the bank identified significant challenges related to macroeconomic conditions, institutional capacity, financial management, and environmental and social safeguards. The project, approved in 2020, is scheduled for completion on November 30, 2027.
However, the bank rated overall implementation progress as “moderately satisfactory”, noting that work had gained momentum following the restructuring of the project to align its scope and financing with the government’s implementation priorities.
Progress has been reported on the 88-megawatt (MW) Gabral-Kalam Hydropower Project, including the commencement of civil works, advances in land acquisition and progress in procuring electromechanical equipment. The project is expected to generate approximately 339 gigawatt-hours of electricity annually.
Despite these developments, the bank’s overall risk rating remains “substantial”, reflecting concerns over governance, technical design, institutional capacity, financial management, and environmental and social compliance.
The original financing package included $594 million for hydropower and renewable energy development, $59 million for environmental and social management, and $55 million for institutional strengthening and project implementation support, alongside approximately $15 million in financing charges.
Disbursement of funds under key loan components has remained limited. Of the $200 million market-based loan, only $3.95 million had been disbursed, representing less than 2 per cent. Disbursements under the $240 million concessional development loan stood at $34 million, or approximately 14 per cent.
The project aims to strengthen provincial institutions and expand renewable energy generation by developing hydropower resources across Khyber Pakhtunkhwa. Its planned investments include the 157MW Madyan Hydropower Project and other facilities along the Swat River and other river basins.
The Swat River Basin alone has an estimated hydropower potential exceeding 2,000MW, with additional sites requiring assessment. The programme also envisages the installation of floating or land-based solar photovoltaic systems at hydropower facilities.
The World Bank said the project would continue to prioritise timely implementation, effective contract management and compliance with applicable environmental and social requirements as it works towards its completion target.
Story by Khaleeq Kiani
