Govt rebuts claims of cancelling power-generation component of Diamer-Bhasha Dam

Govt rebuts claims of cancelling power-generation component of Diamer-Bhasha Dam.

Key points

• News Desk Published August 29, 2026 Updated August 29, 2026 01: 17pm.
• It affirmed that the "Diamer Bhasha Dam generation component is a committed project in both existing and future IGCEP (Indicative Generation Capacity Expansion Plan) documents".
• The Power Division on Saturday refuted a report that asserted that the administration had cancelled the power-generation component of Diamer-Bhasha Dam.
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• Diamer-Bhasha Dam, located on the Indus River near Gilgit-Baltistan.

News Desk Published August 29, 2026 Updated August 29, 2026 01: 17pm. Join our Whatsapp Channel. Add Dawn as a trusted source.

Notably, the Power Division on Saturday refuted a report that asserted that the administration had cancelled the power-generation component of Diamer-Bhasha Dam.

Diamer-Bhasha Dam, located on the Indus River near Gilgit-Baltistan. It is due to have a gross water storage capacity of 8.1 MAF and an installed power generation capacity of 4, 500 megawatts.

As "fake news", in a post on X on Saturday, the energy ministry's Power Division termed the report by Brief, a reader-supported publication.

Brief cited what it asserted was a leaked administration document from the Economic Affairs Division dated early this year. The outlet quoted a source and asserted that the government's decision was based on "lobbying" by independent power producers (IPPs) who secured "vast sums even when their plants produce little or no power".

"Pakistan already has too much generating capacity", the report cited the document as saying, adding the dam's 4, 500-megawatt hydropower complex could be "built at some unspecified later date while Diamer-Bhasha can be built up as a water reservoir for now".

In its rebuttal, the Power Division clarified that the "new IPPs business has permanently closed in Pakistan after the establishment of a free electricity market by the present government".

"Any attempt to link IPPs with this project and sensationalise it is based on nothing but fake assumptions, " the division stated.

Notably, the report further asserted that the leaked documents relayed the Power Division's position that "the government should prioritise the water-storage reservoir while postponing the power-generation and transmission infrastructure".

It continued that "rapid rooftop-solar growth, declining demand, 'substantial excess electricity generation', uncertainty over the coming decade and a lack of financing" are responsible for the "roughly $2 billion power-evacuation system".

For context, the document, it asserted, stated that "spending $2 to $3bn on additional water storage would be more 'pragmatic' than building the power component".

It further asserted that the document asked the water resources and the power divisions to confirm the position so the Prime Minister's Office could "close the matter". It continued that "the civil works allowing the dam to be used for power generation at a later stage 'should be incorporated'".

For now, govt rebuts claims of cancelling power-generation component of Diamer remains the part of the story worth watching, and further updates are likely as more details are confirmed.