Islamabad | ReNews Pakistan
The federal government has allocated PKR 103.086 billion for key water and hydropower projects under the Public Sector Development Programme (PSDP) for fiscal year 2026-27, with major funding directed towards strategic dam construction, hydropower generation, irrigation improvement and water management initiatives across the country.
According to budget documents, the total allocation includes PKR 51.445 billion as rupee cover and PKR 51.641 billion for local expenditure. However, the approved funding is more than 42 percent lower than the PKR 179 billion proposed by the Ministry of Planning, Development and Special Initiatives, indicating a significant reduction from the ministry’s initial demand.
The allocation reflects the government’s continued focus on strengthening Pakistan’s water storage capacity, improving hydropower generation and enhancing flood resilience at a time when water security, climate change and energy needs remain major national challenges.
In the hydropower sector, PKR 28.166 billion has been earmarked for ongoing schemes. The largest allocation has been made for the Dasu Hydropower Project Stage-I, which will receive PKR 15 billion during the upcoming fiscal year. The project remains one of the country’s most important hydropower schemes and is expected to contribute significantly to low-cost electricity generation once completed.
Other major hydropower allocations include PKR 3.4 billion for the 1,410-megawatt Tarbela 5th Extension Hydropower Project, PKR 2.284 billion for the second rehabilitation of the Warsak Hydroelectric Power Station, PKR 2.7 billion for the 34.5 megawatt Harpo Hydropower Project and PKR 2.062 billion for the rehabilitation of the Dargai Hydropower Station.
The government has also allocated PKR 1.484 billion for the refurbishment and upgradation of Mangla Power Station. The project is aimed at increasing the station’s generation capacity from 1,000 megawatts to 1,310 megawatts, helping improve the efficiency and output of one of Pakistan’s key hydropower assets.
In addition, PKR 736 million has been set aside to enhance the capacity of Chitral Hydropower Station from 1 megawatt to 5 megawatts, while PKR 500 million has been allocated for the 54 megawatt Attabad Lake Hydropower Project.
In the water sector, the Mohmand Dam Hydropower Project has received the highest allocation of PKR 22 billion, making it the largest-funded water project under the PSDP for FY2026-27. The project is considered crucial for water storage, flood control, irrigation support and hydropower generation.
The Diamer-Bhasha Dam Project, including the Tangir Hydropower Project, has been allocated PKR 10 billion. A further PKR 4 billion has been earmarked for land acquisition and resettlement activities linked to the project. Diamer/Bhasha Dam remains one of Pakistan’s most strategic long term infrastructure projects due to its expected role in water conservation, energy production and flood mitigation.
To improve water monitoring and management, the government has allocated PKR 5.054 billion for the installation of a telemetry system at 27 locations across the Indus Basin Irrigation System. The project, with a total estimated cost of PKR 23.834 billion, is designed to enable real-time monitoring of water discharge and improve transparency in water distribution among provinces.
Other important allocations include PKR 3 billion for the JICA-assisted flood management enhancement project in the Indus Basin, PKR 3 billion for remodelling the Pat Feeder Canal System in Balochistan and PKR 1.5 billion for the Flood Protection Sector Project-III.
Several dam projects in Balochistan have also been included in the funding plan. These include PKR 1 billion each for the Awaran Dam and Panjgur Dam projects, PKR 1.6 billion for the Garuk Storage Dam in Kharan district, PKR 1.8 billion for the construction of 23 dams under Package-IV and PKR 593 million for 20 dams under Package-III.
Meanwhile, the Kachhi Canal Project has been allocated PKR 1.374 billion, while PKR 910 million has been earmarked for the Mangla Dam Raising Project under its second revised PC-1.
The allocations under Budget 2026-27 show that water storage, hydropower generation and flood protection remain key areas of public sector investment. However, the reduced funding compared to the ministry’s proposed demand may affect the pace of implementation of some large-scale schemes, particularly those requiring sustained financing over multiple fiscal years.
Experts believe that timely completion of these projects is critical for Pakistan’s long-term economic stability, agricultural productivity and energy security. Improved dam infrastructure, efficient irrigation systems and modern water monitoring mechanisms are expected to help the country better manage seasonal water flows, reduce flood risks and support future development needs.

Islamabad | ReNews Pakistan
Federal Minister for Planning, Development and Special Initiatives Ahsan Iqbal has said that a clear timeline has been committed for the completion of the Hyderabad/Sukkur motorway project, reaffirming the federal government’s focus on delivering major infrastructure schemes within the planned development framework.
Speaking during the budget debate in response to points raised by MQM-P lawmaker Syed Waseem Hussain, the minister said the government was giving priority to key road, water and education projects aimed at improving connectivity and public service delivery in Sindh’s major urban centres.
Ahsan Iqbal said work on the new alignment of the M-9 Karachi/Hyderabad motorway had already begun. He added that improved road connectivity was essential for strengthening trade, reducing travel time and supporting long-term economic growth across the region.
The minister stated that the Hyderabad/Sukkur motorway remained an important part of the national connectivity network and that the government was committed to moving the project forward according to the agreed timeline. He said such infrastructure projects would help connect major cities, facilitate freight movement and improve access between economic centres.
Highlighting broader federal initiatives for Hyderabad, Ahsan Iqbal said the government had provided a grant for the establishment of a university in the city. He noted that Hyderabad had long remained underserved in terms of higher education facilities, despite being one of Sindh’s most important urban centres.
According to the minister, the Hyderabad University project had faced delays in previous years, although it was originally expected to be completed earlier. He said the project was now being actively pursued so that students in the city and surrounding areas could benefit from improved access to higher education.
On Karachi’s water supply needs, Ahsan Iqbal said progress was also underway on the K-IV project, commonly known as the K-4 water supply project. He said the project was expected to supply water to Karachi by December 2026, after which operational responsibility would be handed over to the provincial government.
The minister emphasized that close coordination between the federal and provincial governments was necessary for the timely completion of large-scale public welfare and infrastructure projects. He said better coordination would help remove delays, improve implementation and ensure that citizens receive the benefits of development schemes without unnecessary disruption.
Ahsan Iqbal said the government’s development agenda was focused on connectivity, education and essential urban infrastructure. He added that investment in highways, universities and water supply systems would play a key role in supporting economic activity, improving quality of life and promoting balanced development across the country.
The minister reiterated that the federal government remained committed to completing public-interest projects in Sindh and other provinces through coordinated planning, targeted funding and timely execution.

Lahore | ReNews Pakistan
The Punjab government has prepared a Rs 1,220 billion mega economic plan for the new financial year, placing construction, infrastructure and development projects at the centre of its economic revival strategy. Prepared on the special instructions of Punjab Chief Minister Maryam Nawaz Sharif, the plan is being described as the flagship vision of the provincial budget, aimed at accelerating construction activity, industrial growth, private investment and large scale infrastructure development across the province.
According to government sources, Punjab’s key priority in the new financial year will be to boost economic activity, support the construction sector, activate industrial zones and generate new employment opportunities through development projects. For this purpose, the Economic Transformation Plan is being made a central component of the provincial budget.
Under the proposed plan, Rs 300 billion has been earmarked for the Punjab Infrastructure and Guarantee Fund. The fund is designed to provide financial support for major development schemes, roads, industrial infrastructure, business facilitation facilities, private investment and projects launched under public-private partnership arrangements. The government believes that investment in infrastructure will not only stimulate the construction industry but also increase activity in allied sectors such as cement, steel, transport, labour and other related industries.
The proposed establishment of the Punjab Wealth Fund, with an allocation of Rs 700 billion, is also a major part of the plan. The fund is intended to promote long-term investment, economic growth and projects that could help increase Punjab’s revenue, industrial output and employment opportunities in the future.
South Punjab has also been given special importance in the mega economic plan. The government plans to establish new industrial clusters and agro-processing zones in the region, a move expected to increase construction activity and require the development of industrial infrastructure, warehouses, factories, processing units and related facilities. These initiatives are expected to promote investment, local employment and value addition in agricultural production.
Major measures have also been proposed to promote food exports and the agro-industry. According to the government, new facilities, processing zones and logistics infrastructure will be developed to link agricultural production with a modern industrial system, enabling Punjab to become a hub for export-oriented agricultural and industrial products.
The plan also includes a proposed allocation of Rs 30 billion for IT infrastructure and data centres. Under this initiative, work will be carried out on modern digital infrastructure, technology parks, data centres and related facilities. The government maintains that technology-based infrastructure will attract new investment to Punjab and create employment opportunities for young people.
Another Rs 30 billion allocation has been proposed for power sector reforms and private investment. Improvements in the energy sector are being described as essential for industrial and construction activity, as better electricity supply and reduced energy costs would directly benefit industries, commercial centres and development projects.
Investment through public-private partnerships will also remain a key feature of the economic plan. The government aims to involve the private sector in major development projects to accelerate construction work. In addition, a proposal has been made to provide loans of up to Rs 5 billion for industrial development, while small industries will also receive financial assistance to help them participate in construction, industrial and productive activities.
Government circles say Punjab’s Rs 1,220 billion Economic Transformation Plan is not merely a financial package but a coordinated strategy to advance construction, infrastructure, industrial development, technology and investment across the province. Its implementation is expected to speed up major development projects, inject fresh momentum into the construction sector and generate broad-based economic activity in Punjab.

Islamabad | ReNews Pakistan
The Power Division has strongly rejected media claims that the government is considering a new electricity tariff structure to discourage industries from shifting to solar energy or reducing dependence on the national grid.
Responding to a news report titled “New Power Tariff to Deter Solar Shift,” a spokesperson for the Power Division termed the report factually incorrect, misleading and based on an incorrect interpretation of the proposal currently under consideration.
The spokesperson clarified that no proposal has been shared with the International Monetary Fund to penalize industrial consumers for using less than their sanctioned electricity load or for moving toward solar, captive, or other off-grid energy sources.
According to the Power Division, the tariff proposal being discussed is not mandatory. It is an optional tariff model designed to provide industrial consumers with an alternative electricity pricing structure, depending on their operational needs and consumption patterns.
The spokesperson said the relevant clarification had been communicated to the author of the report before publication, but the key point that the proposed tariff would be optional was not properly reflected in the published story.
Under the proposed model, the cost-allocation mechanism would be different from the existing tariff structure. It may include relatively higher fixed charges and lower variable energy charges across different time periods, including solar-generation hours and night-time consumption.
The Power Division said the purpose of the proposal is not to punish industries but to offer a tariff option that may be more suitable for consumers with high utilization rates, stable electricity demand and round-the-clock operations.
The spokesperson explained that process industries and other industrial units operating continuously may benefit from a more predictable and cost-effective tariff structure. However, industries that find the proposed model unsuitable would remain free to continue under the existing tariff regime.
The government emphasized that there would be no obligation for industrial consumers to switch to the new tariff structure. Any consumer that does not wish to adopt the proposed tariff would face no penalty, restriction or adverse consequence.
The Power Division further stated that claims suggesting industries would be punished for consuming less grid power or for installing solar energy systems are entirely unfounded. The spokesperson said such claims represent the interpretation of the report’s author rather than the actual policy proposal.
Officials said Pakistan’s power sector requires careful, fact-based discussion, particularly at a time when the country is dealing with rising electricity costs, changing consumption patterns and growing adoption of solar energy by households, businesses and industries.
The spokesperson added that presenting an optional tariff offering as a punitive measure against solar adoption could create unnecessary confusion among industrial consumers, investors and energy-sector stakeholders.
The Power Division urged media outlets and stakeholders to report on energy-sector reforms with accuracy and technical clarity, saying that tariff proposals should be understood in their proper context before being presented as final government policy.
The clarification comes amid growing public debate over Pakistan’s rapid shift toward solar power, especially among industrial and commercial consumers seeking to reduce energy costs and improve operational stability.