Proposed 115% increase in project cost awaits approval as officials cite rupee depreciation, design changes, floods and security challenges.
ISLAMABAD, PAKISTAN — WEB DESK | October 24, 2026
The estimated cost of Pakistan’s under-construction Mohmand Dam hydropower project has increased to Rs666 billion, representing a 115% rise from the Rs310 billion approved in April 2018, according to government officials and project documents. The revised estimate remains subject to approval.
The Water and Power Development Authority (WAPDA) has proposed increasing the project’s cost by approximately Rs356 billion. The revised estimate was presented to the Central Development Working Party (CDWP), but the forum deferred consideration because of limited time, according to the reports.
Rupee Depreciation Among Major Reasons for Cost Increase
Officials told the Planning Commission that fluctuations in the rupee-dollar exchange rate accounted for approximately 51% of the overall cost increase. The project includes both local and foreign currency expenses, making its budget vulnerable to changes in exchange rates.
Other factors identified by project management include design modifications, the impact of severe flooding in 2022 and security-related difficulties. Floodwaters in the Swat River damaged diversion tunnels, disrupting construction work and contributing to delays.
The Planning Commission has requested further details about dollar-denominated contractual payments and the provisions governing exchange-rate adjustments. Officials have emphasised that foreign currency obligations must be examined against the relevant contract terms rather than simply converted using current exchange rates.
Dam and Power Generation Costs Increase
Under the proposed revised estimate, the dam construction component is valued at Rs267 billion, while the power generation component is estimated at Rs399 billion.
The construction component has increased by Rs153 billion, or 134%, compared with its earlier estimate. The power generation component has risen by Rs204 billion, or 105%, according to the reported project documents.
The figures underline the financial pressures facing a major infrastructure project originally scheduled for completion by September 2025. The revised cost proposal has not yet received final approval, and the project has experienced both financial escalation and construction delays.
Construction Progress and Spending
Project documents cited in the reports show that approximately Rs275 billion had been spent by the previous month, while physical construction progress stood at around 57%. The project is being built by a joint venture comprising China’s China Gezhouba Group Company Limited and Pakistan’s Descon Engineering Limited. <Cite refs={[“turn189749view0″,”turn189749view1”]}/>
The Planning Commission has expressed concern over the cost escalation and delays. It has recommended an independent third-party assessment of financial expenditure, physical progress, changes in project scope and additional costs. It has also called for an updated financial plan covering government funding and other financing sources. <Cite refs={[“turn189749view0″,”turn189749view1”]}/>
Mohmand Dam’s Importance for Water and Energy
Located on the Swat River in Khyber Pakhtunkhwa, the Mohmand Dam project is intended to strengthen Pakistan’s water storage capacity, support electricity generation and help manage flood risks.
Upon completion, the project is expected to add approximately 1.29 million acre-feet to the country’s overall water storage capacity. The hydropower facility is designed for an installed capacity of 800 megawatts, according to WAPDA’s published project information. <Cite refs={[“turn189749view0″,”turn727878search14”]}/>
The proposed increase to Rs666 billion highlights the financial and implementation challenges facing the project. Its revised budget, funding arrangements and remaining construction schedule will depend on further review and the relevant approval process.
