Budget 2026-27: Funding Concerns Emerge Over Pakistan’s Water and Hydropower Projects
Pakistan’s upcoming federal budget is expected to allocate around Rs179 billion for water and hydropower projects under the Public Sector Development Programme (PSDP) 2026-27, raising questions about the pace of several major infrastructure schemes considered important for the country’s long-term water and energy needs.
Officials and sector experts believe additional investment may be required to accelerate ongoing dam and hydropower projects, improve water storage capacity and support future energy generation. They argue that expanding water infrastructure is increasingly important as Pakistan faces challenges related to water availability, climate change and rising electricity demand.
According to officials, the proposed allocation is higher than the previous year’s funding but remains below the amount some experts consider necessary for fast-tracking major projects and initiating new reservoir schemes.
Major Projects Under Construction
Several large-scale water and hydropower projects are currently being developed by WAPDA, including:
- Mohmand Dam
- Tarbela 5th Extension Project
- Diamer-Bhasha Dam
- Dasu Hydropower Project
- K-IV Greater Karachi Bulk Water Supply Scheme
Together, these projects are expected to significantly increase Pakistan’s water storage capacity and hydropower generation over the coming years.
The Mohmand Dam is designed to store water, generate 800MW of electricity and supply drinking water to Peshawar. Meanwhile, the Tarbela 5th Extension is expected to add 1,530MW to the national grid, increasing the overall generating capacity of the Tarbela complex.
Diamer-Bhasha Dam, one of Pakistan’s largest infrastructure projects, is planned to store 8.1 million acre-feet of water and generate 4,500MW of hydropower. The project is also expected to support irrigation and contribute low-cost electricity to the national grid.
The Dasu Hydropower Project, currently under development, is expected to add 4,320MW of generation capacity in phases, while the K-IV project aims to strengthen Karachi’s water supply system.
Focus on New Water Storage Projects
Water experts have also highlighted the importance of developing additional storage facilities on the Chenab River. Proposed projects include the Chiniot, Shah Jeewna, Mid Ranjha and Wazirabad dams.
Among them, the Chiniot Dam project is considered a key future reservoir. The proposed facility would provide water storage capacity while also generating electricity for the national grid.
Experts note that timely funding decisions can help prevent project delays and rising construction costs.
Neelum-Jhelum Project Remains Under Review
The Neelum-Jhelum Hydropower Project, which has an installed capacity of 969MW, has remained non-operational following damage to its tailrace tunnel. Discussions regarding repairs and restoration of generation continue, while authorities review technical and administrative aspects of the project.
Industry observers say the project highlights the importance of timely maintenance and infrastructure management in ensuring long-term energy security.
Long-Term Water and Energy Strategy
WAPDA officials say the authority is currently implementing one of its largest development portfolios, consisting of eight major water and hydropower projects. These initiatives are expected to contribute significantly to Pakistan’s water management capabilities and renewable energy production by the end of the decade.
Experts generally agree that continued investment in water storage, flood management and hydropower infrastructure will remain an important part of Pakistan’s long-term economic and environmental planning.
