The World Bank, an international financial institution that provides loans and grants for capital projects in low- and middle-income countries, will lend Pakistan US$1 billion to construct the country’s largest hydropower plant near Dasu in the northern region of Khyber Pakhtunkhwa Province.
Located at the Dasu Dam on the Indus River, the Dasu Hydropower Plant is projected to generate 21 TWh (terawatt hours) annually, with an installed capacity of 4,320 MW (megawatts). The dam features a gravity design made of roller-compacted concrete and can reservoir up to 1.4 billion cubic meters (370 billion gallons) of water.
This new loan complements the original $588 million the World Bank lent for preparatory work, and an additional $700 million provided in 2020 for transmission line work. In total, the World Bank has financed approximately $2.3 billion of the $4.3-billion project. Additional financing has come from a consortium of local banks and foreign commercial financing from Credit Suisse Bank. Pakistan’s Water & Power Development Authority is also committed to financing 15% of the project’s base cost.
The development of the Dasu Dam and hydropower project has been a long journey, initially proposed in 2001 with a feasibility study completed in 2009. The project is being constructed in two phases, each adding over 2,000 MW of power generation capacity. Once complete, the first phase is expected to contribute more than 12 billion units of electricity annually, with the second phase providing an additional nine billion units.
Despite the lengthy development timeline, Pakistan remains on track to complete the project by its original goal date next year, with power generation anticipated to commence in the second half of 2024. Initial groundwork began in 2014, with construction starting in 2017. China Gezhouba Group Company Limited is the main works and civil works contractor, and construction commenced in 2018. In 2020, a joint venture of GE Hydro China and Power China Zhongnan Engineering Corporation joined the project to provide design, supply, and installation of six Francis turbines, generators, main transformers, generator, and station service switchgear along with related equipment.
Despite international cooperation and collaboration between Pakistani and Chinese firms, the project has faced significant conflict. In July 2021, 13 Chinese and Pakistani laborers were killed when a bus transporting them was attacked by an explosive device, causing the bus to fall into a ravine. An additional 28 people were injured. The Pakistani Taliban was blamed for the attack, and the perpetrators were sentenced to death in 2022. In March 2023, another bus transporting five Chinese engineers and a Pakistani driver was attacked by a suicide bomber, resulting in the deaths of all seven individuals. No group has claimed responsibility for this attack.