PESHAWAR: Khyber Pakhtunkhwa government has removed the 215-megawatt Madian Hydropower Project from the World Bank-funded Khyber Pakhtunkhwa Hydropower and Renewable Energy Programme due to a lack of additional funds, prolonged delays and rising project costs.
The provincial cabinet has approved the decision, which has also been included in the World Bank’s restructuring document. According to the documents, the World Bank’s mid-term review in February 2026 found that the additional funding needed for the Madian Hydropower Project could not be secured. This created financial and contractual risks for the project.
According to the documents, the project is facing an estimated funding gap of $452.5 million, including $267.5 million in cost overruns and $185 million due to the expected shortfall in commercial financing. Following the restructuring, the government decided to focus available resources on the 94.96MW Gabrial Kalam Hydropower Project, where planning, design and contractor selection have already been completed.
The provincial cabinet has directed the Energy and Power Department and the Pakhtunkhwa Energy Development Organization (PEDO) to explore alternative financing and investment options for the Madian project so it can potentially be completed under a different funding model in the future.
The World Bank had approved a $450 million loan for the project in September 2020, with completion originally scheduled for November 30, 2027. However, nearly six years later, the project has yet to reach the major construction stage, while progress on the Gabrial Kalam project has also faced delays.
Due to rising costs and a lack of additional funding, the government decided to restructure the project and remove Madian from the program. The World Bank has also proposed extending the project’s completion deadline.
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