ISLAMABAD : The Government of Khyber Pakhtunkhwa (KP) has urged the federal government to ensure enhanced provincial participation in the under-preparation Integrated Energy Plan (IEP), with priority given to hydropower development, strengthening of transmission infrastructure in the province, transparent revenue-sharing mechanisms, and support for renewable energy and electric vehicle (EV) infrastructure in line with the spirit of the 18th Constitutional Amendment.
The proposals were submitted by the Additional Secretary (Oil & Gas), Energy and Power Department, KP, to the Power Division in response to its letter dated February 23, and a meeting held on February 25 under the chairmanship of the Minister for Energy (Power Division).
According to the submission, the KP Oil & Gas Company Limited (KPOGCL) proposed inclusion of provincial nominees in the proposed IEP Secretariat and Steering Committee. It also called for due consideration of Articles 158 and 172(3) of the Constitution, along with the 18th Amendment, to safeguard provincial rights including royalty payments, windfall levy and other constitutionally guaranteed entitlements.
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The provincial government also emphasised the need for adequate security arrangements for energy projects to protect infrastructure and investments. It suggested that the IEP should allocate resources for security systems in KP to ensure stable project operations and enhance investor confidence.
The submission noted that KP, which hosts the largest share of Pakistan’s forests, can integrate forest-based carbon credits into the IEP as a sustainable financing mechanism. By protecting forests and expanding afforestation and reforestation initiatives, the province can enhance carbon sequestration and generate verified carbon credits. Revenue generated from these credits could be reinvested in renewable energy projects, rural electrification, clean cooking initiatives and energy efficiency programmes.
KP also proposed the addition of another “E” in the E4 framework to explicitly incorporate expertise, education and capacity building.
The Pakhtunkhwa Energy Development Organisation (PEDO) recommended prioritising development of indigenous and environmentally sustainable hydropower resources in KP to support the country’s Sustainable Development Goals (SDGs) and Nationally Determined Contributions (NDCs) in line with international commitments towards net-zero emissions.
PEDO further noted that KP possesses significant hydropower and solar potential along with vast forest resources and is already contributing to reduction of the national carbon footprint. It proposed that future energy planning should incentivise systematic claiming of carbon credits and enable provinces to effectively access international carbon-credit markets.
It also called for better alignment between national and provincial energy policies through a unified IEP framework and greater clarity on mechanisms to synchronise national energy planning with provincial Annual Development Programmes (ADPs) to ensure effective implementation of energy projects.
Meanwhile, the Electric Inspector KP recommended formal provincial representation in federal power planning bodies under the Ministry of Energy (Power Division) and structured consultations with provinces before approval of national generation, transmission and capacity expansion plans.
Other proposals include preferential inclusion of run-of-river and medium hydropower projects in the IEP, fast-track approvals for provincial hydropower schemes, and clear mechanisms for timely payment of hydel profits and royalties along with transparent accounting and reconciliation systems with federal agencies. The province also sought priority investment in transmission infrastructure for hydropower evacuation, development of grid stations in merged districts and remote areas, and alignment of the IEP with KP’s development priorities.
The recommendations further emphasised the need to align the IEP with KP’s climate and disaster resilience policies, promote a low-carbon energy mix based on hydropower and solar, and incorporate flood-resilient and climate-proof infrastructure.
The KP government also sought federal support for technical training, energy data systems, policy research units, improved data sharing and transparency, as well as real-time access to generation data, load forecasts and capacity payment and information through integration with federal planning databases. In addition, the province called for local hiring quotas in federal energy projects in KP, equitable allocation of gas and fuel for provincial industry and power plants, protection of provincial industrial growth, and the establishment of a joint federal-provincial energy coordination committee.
The provincial government also proposed an institutionalised mechanism for resolving tariff, royalty and planning-related disputes between the federation and provinces.
Copyright Business Recorder, 2026
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