ISLAMABAD: Chief Minister Khyber Pakhtunkhwa Sohail Afridi has urged the federal government to immediately release Rs71.4 billion in outstanding Net Hydel Profit (NHP) payments to help stabilise the province’s finances, sources in the Ministry of Water Resources told Business Recorder.
In separate letters to Minister for Water Resources Moeen Wattoo and Minister for Power Sardar Awais Ahmad Khan Leghari, the chief minister sought their personal intervention in what he described as a matter of critical financial importance—the long-standing issue of unpaid NHP arrears.
The chief minister noted that Khyber Pakhtunkhwa is constitutionally entitled to receive NHP from the federal government under Article 161(2) of the 1973 Constitution, which states that net profits earned by the federal government from bulk power generation at hydroelectric stations must be paid to the province where such stations are located.
READ MORE: NHP, NFC Award: CM says Centre owes massive amount of money to KP
Khyber Pakhtunkhwa, which contributes over 60 percent of Wapda’s total hydropower generation capacity, has historically been the backbone of the country’s hydroelectric system.
However, persistent delays in the release of NHP have significantly constrained the province’s fiscal space and impaired its ability to finance essential development projects.
According to the chief minister, total outstanding NHP arrears stand at Rs71.410 billion. While Rs18 billion has been released so far, a substantial balance of Rs53.410 billion remains unpaid.
In addition, the current fiscal year’s (2025–26) budgeted NHP amount of Rs34.580 billion has yet to be disbursed.
He urged the two federal ministers to direct the immediate release of both the pending arrears and the current year’s allocation to stabilise the province’s finances.
The chief minister also called on the federal government to work with Khyber Pakhtunkhwa to establish a predictable and transparent NHP payment mechanism, in line with the 2016 memorandum of understanding (MoU), to prevent the accumulation of future arrears.
“I strongly urge your cooperation and prompt action for the timely release of NHP funds to fulfill constitutional commitments and past CCI approvals,” the chief minister said in his letter to the minister for water resources.
Last month, the Water and Power Development Authority (Wapda) asked the Central Power Purchasing Agency–Guaranteed (CPPA-G) to release Rs17 billion per month for onward payment of NHP to the governments of Khyber Pakhtunkhwa and Punjab.
Responding to a letter from CPPA-G’s chief executive officer, Wapda’s member finance stated that Wapda’s hydroelectric receivables had reached Rs232.954 billion as of October 31, 2025. These include energy receivables of Rs42.868 billion, NHP payables to provinces amounting to Rs108.814 billion (Khyber Pakhtunkhwa: Rs64.550 billion; Punjab: Rs44.264 billion), and hydroelectric arrears of Rs81.272 billion.
Wapda noted that CPPA-G is currently making payments only against hydroelectric invoices for December 2024, leaving a 10-month overdue billing gap, while no payments have been made against hydroelectric arrears.
The authority further stated that during FY2024–25, despite irregular fund releases by CPPA-G, it paid Rs36 billion in NHP to the Khyber Pakhtunkhwa government.
However, current monthly releases are insufficient to enable Wapda to pass on Rs3 billion each to Khyber Pakhtunkhwa and Punjab while also meeting essential working capital requirements, including operations and maintenance, development spending, and debt servicing.
The member finance also pointed out that during the clearance of circular debt in FY2023–24, Wapda’s unbilled circular debt liability related to the Diamer-Bhasha Dam—amounting to Rs35.442 billion—was adjusted against energy receivables instead of non-energy receivables, further straining the authority’s cash flow. In view of the increased NHP obligations, Wapda has requested CPPA-G to enhance monthly releases to Rs17 billion for onward payment to both provinces and to clear overdue hydroelectric receivables at the earliest.
Separately, the Khyber Pakhtunkhwa government has also sought the prime minister’s support for an “out-of-the-box” solution to the NHP issue, which remains unresolved between Wapda and the provinces.
Copyright Business Recorder, 2026
Comments