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

The Power Division of Pakistan's government has dismissed claims that the power-generation component of the Diamer-Bhasha Dam project has been cancelled. The Diamer-Bhasha Dam, situated on the Indus River in Gilgit-Baltistan, is projected to have a water storage capacity of 8.1 million acre-feet (MAF) and generate 4,500 megawatts (MW) of electricity.

The energy ministry's Power Division categorised the Brief's report as "fake news" and affirmed that the dam's generation component is a committed project in the existing and future Indicative Generation Capacity Expansion Plan (IGCEP) documents.

Brief, a reader-supported publication, cited a purported leaked government document from the Economic Affairs Division as evidence. The outlet interviewed a source who alleged that the government's decision was influenced by lobbying from independent power producers (IPPs) who received large sums of money despite their plants producing little or no power.

According to the report, Pakistan already possesses excessive generating capacity, and the dam's 4,500 MW hydropower complex could be constructed at a later date while serving as a water reservoir.

The Power Division refuted these claims, stating that "new IPPs business has permanently closed in Pakistan after the establishment of a free electricity market by the current government." The division emphasized that any attempt to link IPPs with the Diamer-Bhasha project and sensationalize it is based on "fake assumptions." The report further claimed that the leaked documents suggested the government should prioritize the water-storage reservoir while postponing the power-generation and transmission infrastructure.

It 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 also stated that investing $2 to $3 billion in additional water storage would be more "pragmatic" than building the power component and recommended confirming this position for the Prime Minister's Office to close the matter.