• Official reveals cost of phase I shot up by 190.1% to Rs1,700bn.
• Rise attributed to various factors such including in land acquisition. 
• After erection of stage II, Dasu project would generate 4,320 MWs. 

The World Bank (WB) is set to issue a fresh $1 billion loan for the first phase of the Dasu hydropower project, following the approval of a revised PC-1 with updated completion timelines, The News reported on Monday.

A senior official of the Economic Affairs Division (EAD) revealed that cost of the first stage of the project has shot up by 190.1% to Rs1,700 billion from Rs586 billion.

The increase in the cost is attributed mainly to a delay in land acquisition, security concerns and an increase of US dollar value by 178%.

“The project of stage I would generate 2,160 MWs. However, after erecting stage II of the project, it would generate 4,320 MWs. Dasu Hydropower Project is a run-river project on the Indus River located seven kilometres upstream of Dasu Town, District Kohistan (Upper), Khyber Pakhtunkhwa.

“The site is 74km downstream of the proposed Diamer Bhasha Dam site and 345km from Islamabad. The project will generate 4,320 MWs (12 Units @ 360 MW each) hydroelectric power with annual energy of 21,445 GWh and will be developed in two stages (Stage I and II).

“Stage I will generate 2,160 MW (06 Units @ 360MW each) with annual energy of 12,222 GWh. Stage I will be completed in five years. The WB has already given the loan of $588 million and also extended the guarantee leverage for generating $460 million from the international market.”

However, under the new financing for the project, out of $1 billion, $800 million loan is of International Development Association (IDA) and $200 million will be extended under the International Bank for Reconstruction and Development (IBRD).

Out of the IDA loan, Pakistan will attain $435 million at zero interest rate, $365 million at 5.83% interest rate, and get $200 million under IBRD at 6.13% interest rate.

“We have prepared the revised PC-1 of the project at the cost of Rs1,700 billion and will send it within a couple of days to the Planning Commission for its approval. After that, Water and Power Development Authority (Wapda) and WB will formally sign the $1 billion (loan),” the Ministry of Water Resources confirmed.

The land acquisition for the dam project was to be completed by 2014, but the process finished in 2021-22. Another reason for the escalating cost is the appreciation of US dollar by 178% to Rs278 from Rs100.

“The project was earlier scheduled to get completed by 2023-24 which would now be completed by 2027-28. The Economic Affairs Division has played a pivotal role in diverting the bank’s loan to the project of paramount importance. The WB has already extended $1 billion loan to Pakistan in other heads, but it was not being spent. This is why the loan has been re-purposed and diverted to the Dasu Dam with the approval of the executive board of the bank,” added the ministry.