The government has requested the World Bank to approve a 10th restructuring of the Tarbela Fourth Extension Hydropower Project to ensure uninterrupted construction work for the next eight months, Business Recorder reported.Â
The restructuring seeks reallocation of funds within the International Bank for Reconstruction and Development (IBRD) loan to cover civil works expenses, following a request from the Ministry of Economic Affairs on behalf of the Water and Power Development Authority (WAPDA).
The $400 million parent project, initially approved in 2012 along with SDR 283.7 million in IDA credit, aimed to add 1,410 megawatts (MW) of capacity through Tunnel 4 at the Tarbela Dam.Â
Subsequent additional financing of $390 million from IBRD and $300 million from the Asian Infrastructure Investment Bank (AIIB) was approved in 2016 for the Tarbela Fifth Extension Hydropower Project (T5HP), adding another 1,530 MW.
Both loans also finance associated infrastructure, including a 500kV transmission line from Tarbela 5 to the Islamabad West Substation, environmental management, and project supervision. The World Bank has extended the loan closing date to September 2027, while AIIB’s loan now closes in June 2028.
WAPDA informed that while $256.5 million remains un-disbursed, all IBRD civil works funds have been fully used, and AIIB funds will be exhausted by October 2025. Payments worth PKR 43 billion and CNY 959 million have been certified so far, with $114.8 million disbursed from IBRD and $140.4 million from AIIB, in addition to WAPDA’s $50 million equity.
Currently, civil works on T5HP have reached 54% completion. Key milestones include concreting of the vertical shaft and progress on the powerhouse and tailrace channel. WAPDA has requested reallocation of $63.53 million from IBRD and $30 million from AIIB to sustain progress.
The additional costs stem from unforeseen geological conditions around Tunnel 5, increased reinforcement needs, price adjustments, and gate rehabilitation requirements. The project’s E&M (electrical and mechanical) works are 57% complete, with equipment delivery expected in FY2026.
Meanwhile, the 500kV transmission line stands 86% complete, with 143 of 189 towers erected. Coordination among WAPDA, the National Grid Company, and contractors is ongoing to ensure timely interconnection before commissioning.
The World Bank noted that additional financing will be required in FY2026 to bridge the funding gap and complete the project. The proposed reallocation, it added, will sustain critical civil works until new financing arrangements are finalized.
