Pakistan's Power Division and the federal government are seeking significant funding for energy infrastructure in the fiscal year 2026-27 budget [1], [2].
These allocations aim to stabilize the national electricity supply and initiate critical power-generation infrastructure to reduce energy shortages. The scale of the investment reflects a strategic push to modernize the grid and increase domestic energy production.
The government has proposed an allocation of Rs 91 billion [1] to fund 48 specific projects within the Power Division [1]. These initiatives are designed to strengthen the existing electricity framework, and improve distribution efficiency across the country.
Parallel to these divisional projects, the federal government is moving to include the power-generation component of the Diamer-Bhasha Dam in the next fiscal year's Public Sector Development Programme (PSDP) [2]. This specific portion of the dam project requires an estimated Rs 1.424 trillion [2].
The Diamer-Bhasha Dam is a cornerstone of Pakistan's long-term energy strategy. By integrating the power-generation phase into the FY 2026-27 budget [1], the government intends to accelerate the transition toward sustainable, large-scale hydroelectric power.
Officials in Islamabad said the combined funding efforts are necessary to address the systemic gaps in the power sector. The focus remains on diversifying energy sources to mitigate the impact of fluctuating global fuel prices and internal demand surges.
“Pakistan's Power Division is seeking Rs 91 billion for 48 projects.”
The massive scale of the proposed investment, particularly the trillion-rupee allocation for the Diamer-Bhasha Dam, indicates a shift toward hydroelectricity to reduce reliance on expensive imported fuels. If approved, these expenditures will place a significant demand on the federal budget for FY 2026-27, potentially impacting other public sector development priorities.
