Pending approvals for the revised PC-1 project for the 2,160 MW Phase 1 hydropower project and unresolved security concerns are delaying the signing of additional $1 billion in financing agreements with the World Bank.
Business Registrar The Ministry of Economic Affairs has urged the Ministry of Water Resources to expedite the submission and approval of the revised PC-1 project for the 2,160 MW Dassault Hydropower Phase 1 project, it reported, citing sources. This step is considered crucial for finalizing and activating the loan and financing agreements negotiated with the World Bank.
In a letter to the Ministry of Water Resources, the Ministry of Environment highlighted that during negotiations held on April 29, 2024, the World Bank agreed in principle to extend the project closure date until December 31, 2028.
However, approval of the revised draft PC-1 remains pending, delaying the signing of additional financing agreements that include an extended timeline.
The World Bank Board of Executive Directors approved a second additional financing of $1 billion for the project on June 10, 2024. The World Bank mission, which visited Pakistan from September 2 to 13, 2024, expressed concerns about the slow progress of the project, attributing Due to the delay in restrictions imposed on the ground transportation of international workers and experts to Dassault and the lack of armored vehicles for their movement in the project areas.
It also noted the delay in concreting the integrated cofferdam, a major milestone that is now expected to begin during the low flow season of August-September 2025.
The mission urged the government to strengthen security measures to ensure safe movement of project staff and address logistical challenges hindering progress.
Progress has also been hampered by delays in the construction of a 132-kilovolt transmission line, which is critical to supplying the dam’s crushing and mixing plants.
The current closing date for the Dassault Hydropower Project – Phase 1 is 30 June 2025. The Ministry of Environment stressed that any further delay in obtaining approval for the revised Phase 1 project could jeopardize the availability of additional financing required to implement the project.
