Hydropower Development Funding Squeeze: Proposed Rs179 Billion PSDP Sparks Delay Fears for Mega Dams

LAHORE / ISLAMABAD — Serious concerns have rippled through the energy sector following the government’s proposal to allocate only Rs179 billion for water and hydropower projects in the upcoming Public Sector Development Programme (PSDP) for FY2026-27. Senior WAPDA officials have warned that the sector requires a bare minimum of Rs500 billion to maintain momentum. This severe funding squeeze could drastically delay work on multi-billion dollar strategic megaprojects, including the Diamer-Bhasha and Dasu dams. Experts warn that stretching out these project timelines will inevitably trigger massive cost overruns and prolong the country’s dependency on high-cost thermal energy imports.