PPIB likely to delay 1832MW hydel projects

ISLAMABAD: Private Power Infrastructure Board (PPIB) has reportedly decided to put three hydel projects of 1832 MW on ice due to declining demand caused by the surge in rooftop solar energy and not qualifying under IGCEP 2025-2035 least-cost optimisations.

During the audit of PPIB for the financial year 2024-25, it was observed that three hydropower projects 700.7 MW Azad Pattan, 1,124 MW Kohala and 08 MW Kathai-II remained unimplemented due to persistent delays in achieving Financial Close (FC).

LoS against Azad Pattan project was issued on June 30, 2016 but failed to achieve FC by December 31, 2024 despite five extensions due to Sinosure-related financing constraints.

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The sponsor requested further extension up to December 2027, however, the PPIB Board in its 148th meeting held on August 01, 2025) decided to maintain status quo pending the outcome of the CPEC Energy Cooperation List Adjustment Joint Study, particularly as the project was not optimised in draft IGCEP 2025-35.

Similarly, LoS was issued against Kohala Project on December 31, 2015 but could not achieve the financial closure despite multiple extensions up to September 30, 2027.

In the case of Kathai-II LoS was issued on November 20, 2019 but the project failed to achieve FC due to non-availability and delayed approval of standardised SPDs requiring ECC/CCoE approval, despite extensions. Resultantly, the Board approved cancellation of LoS with mutual consent in August 2025, reflecting systemic facilitation gaps to the Ministry in December, 2025.

The management replied that the Azad Pattan Hydropower Project and Kohala Hydropower Project was not optimised in the IGCEP 2025-2035 due to declining demand caused by the surge in rooftop solar energy.

Copyright Business Recorder, 2026