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

The Power Division of the government refuted a report claiming that the Diamer-Bhasha Dam's power-generation component had been cancelled. The Diamer-Bhasha Dam, situated on the Indus River near Gilgit-Baltistan, is expected to have a water storage capacity of 8.1 million acre-feet and a power generation capacity of 4,500 megawatts.

On Saturday, the energy ministry's Power Division called the report from Brief, a reader-supported publication, "fake news." They affirmed that the "Diamer Bhasha Dam generation component is a committed project in both existing and future IGCEP (Indicative Generation Capacity Expansion Plan) documents."

Brief cited a leaked government document from the Economic Affairs Division, dated early this year, as the source of their claims. The outlet quoted a source and stated that the government's decision was influenced by lobbying from independent power producers (IPPs) who received "vast sums even when their plants produce little or no power."

The report claimed that Pakistan already had too much generating capacity, and the dam's 4,500-megawatt hydropower complex could be built at some unspecified later date while the dam could be built up as a water reservoir for now.

The Power Division clarified that the new IPPs business has permanently closed in Pakistan following the establishment of a free electricity market by the current government. They stated that any attempt to link IPPs with the project and sensationalize it is based on "fake assumptions." The report also claimed that the leaked documents suggested the Power Division's position that "the government should prioritize the water-storage reservoir while postponing the power-generation and transmission infrastructure."

The document added that "rapid rooftop-solar growth, declining demand, 'substantial excess electricity generation', uncertainty over the coming decade, and a lack of financing" were responsible for the roughly $2 billion power-evacuation system. The document further stated that "spending $2 to $3bn on additional water storage would be more 'pragmatic' than building the power component."

The Power Division also mentioned that the document requested the water resources and power divisions to confirm the position so the Prime Minister's Office could "close the matter." They added that "the civil works allowing the dam to be used for power generation at a later stage 'should be incorporated'."