ISLAMABAD, October 29, 2026 — The World Bank has raised concerns about progress on a $727 million hydropower and renewable-energy project in Khyber Pakhtunkhwa, warning that significant risks remain despite improvements in implementation.
The bank assessed progress towards the project’s development objectives as “moderately unsatisfactory”, although it rated overall implementation as “moderately satisfactory”.
Approved in 2020, the Khyber Pakhtunkhwa Hydropower and Renewable Energy Development Project is intended to expand electricity generation from renewable sources and strengthen provincial energy institutions. The project is scheduled to close on November 30, 2027.
One of its main components is the 88-megawatt Gabral-Kalam hydropower scheme in Swat, which is designed to generate approximately 339 gigawatt-hours of electricity a year.
In its latest assessment, the World Bank reported that civil works had begun at Gabral-Kalam, land acquisition had advanced and procurement of electromechanical equipment was progressing.
Financial disbursements, however, remain limited across important parts of the financing package, reflecting the challenges still facing the project.
The bank also identified substantial risks relating to institutional capacity, financial management, economic conditions, and environmental and social safeguards.
The project has undergone restructuring to bring its scope and funding into line with revised implementation priorities.
Earlier security-related travel restrictions prevented a World Bank mission from visiting certain project locations, making it more difficult to assess proposed investments.
Once completed, the project could provide Khyber Pakhtunkhwa with additional renewable electricity and support the longer-term development of its hydropower resources.
The bank’s latest findings point to the work still required on construction, project management and environmental safeguards ahead of the November 30, 2027 deadline.