ISLAMABAD: The World Bank’s implementation support mission could not undertake planned field visits to the Gabral-Kalam Hydropower Project and proposed alternative investment sites in Khyber Pakhtunkhwa due to prevailing travel restrictions amid the province’s law and order situation, leaving the Bank’s due diligence of proposed investments incomplete.
In a letter dated October 14, 2026, addressed to Secretary Economic Affairs Muhammad Humair Karim and Additional Chief Secretary Planning and Development Department Khyber Pakhtunkhwa Islam Zeb, the World Bank stated that travel restrictions had prevented the mission from carrying out the planned visits during its September 14-17, 2026, mission.
The mission was reviewing progress on restructuring the Khyber Pakhtunkhwa Hydropower and Renewable Energy Development Project (KHRE), implementation of the Gabral-Kalam Hydropower Project (GKHPP), options for utilising project savings for alternative investments and progress on technical assistance activities.
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“The prevailing travel restrictions prevented these visits, leaving the due diligence of the proposed alternative investments incomplete,” the letter stated, adding that the mission intended to undertake the visits as soon as travel conditions permitted and subsequently finalise its assessment.
The inability of the World Bank team to visit the proposed investment sites underscores the operational challenges facing development projects in the province amid security-related restrictions. However, the letter did not specify particular security incidents or identify the locations responsible for the restrictions.
The World Bank had approved restructuring of the KHRE project on June 12, 2026, at the government’s request to remove activities related to the Madyan Hydropower Project (MHPP). The restructuring made approximately USD147.3 million available for new investments and contingencies and introduced other revisions to facilitate implementation of the remaining project activities.
The World Bank has asked the Economic Affairs Division and the Khyber Pakhtunkhwa government to expedite approval of the revised PC-I through the Provincial Development Working Party (PDWP) and Central Development Working Party (CDWP), as applicable, to facilitate timely signing of an amendment to the Financing and Implementation Agreements.
Regarding the Gabral-Kalam Hydropower Project, the mission noted significant progress in civil works, construction of the project colony and land acquisition. However, it identified several issues requiring close attention as the project enters the construction phase.
The electromechanical contract remains a major concern. Although the World Bank has issued a no-objection to the Bid Evaluation Report, contract signing is pending because the most advantageous bidder has not fulfilled the award conditions. The Bank warned that failure to resolve the matter promptly could delay the project.
The Pakhtunkhwa Energy Development Organization (PEDO) has agreed to undertake a thorough assessment and submit proposed solutions and next steps to the Bank.
The mission also stressed the need to strengthen contract supervision, finalise the contract implementation plan and ensure timely mobilisation of the contractor. Monthly site reviews involving the contractor and resident engineer are to be held.
Security arrangements for the project site also require finalisation by the Khyber Pakhtunkhwa government and PEDO. The World Bank noted that these arrangements could have significant cost implications and called for their completion to avoid delays.
The mission further reviewed environmental and social safeguards, including implementation of the Environmental and Social Management Plan, occupational health and safety requirements, and livelihood restoration measures.
On proposed alternative investments, PEDO had suggested a Munda hydropower project and the Swat Valley corridor transmission line as potential options. However, the World Bank said the required due diligence remained incomplete because the planned field visits could not be undertaken.
The Bank emphasised that any proposed new investment must demonstrate a clear link with the project’s development objectives and satisfy its environmental, social and economic requirements. Feasibility, sustainability and implementation readiness would need to be assessed before decisions could be finalised.
The mission also reviewed technical assistance activities, including renewable energy planning, development of a pipeline of bankable investments and improvements in the power sector covering generation, transmission and distribution.
The World Bank said it would continue to work with the federal and provincial governments and PEDO to support implementation of the project.
Copyright Business Recorder, 2026