The World Bank has approved an additional $300 million in financing for Pakistan's Tarbela hydropower expansion programme, providing critical support for the completion of the Tarbela Fifth Extension Hydropower Project (T5HP) amid rising project costs.

According to official sources, the additional financing will be channelled through the Tarbela Fourth Extension Hydropower Project (T4HP) framework and represents the final tranche of World Bank investment required to achieve the project's intended outcomes.

The 1,530-megawatt Tarbela Fifth Extension is currently at an advanced stage of construction, with project implementation reported as highly satisfactory. Commercial commissioning of the generating units is expected in July 2027.

Authorities have emphasized that the timely completion of T5HP is crucial for the safe operation of Tunnel 5 and the Tarbela Reservoir, which remains one of Pakistan's most strategic assets for irrigation and power generation.

The project includes the construction of a 1,530MW hydropower facility and a raised intake structure on the existing Tunnel 5, alongside a 500kV double-circuit transmission line linking Tarbela with the Islamabad West Substation. Additional interconnections within the Tarbela power complex are also part of the development plan.

The hydropower component is being executed by WAPDA, while the associated transmission infrastructure is being developed by the National Grid Company (NGC), formerly known as NTDC.

The need for additional financing emerged after project costs increased due to elevated inflation, higher-than-anticipated construction volumes, rehabilitation and replacement requirements for Tunnel 5 gates, and financing costs incurred during the construction period.

Existing financing for T5HP includes a $390 million loan from the International Bank for Reconstruction and Development (IBRD), a $300 million co-financing facility from the Asian Infrastructure Investment Bank (AIIB), and equity contributions from WAPDA.

The Tarbela Fifth Extension follows the successful completion of the Tarbela Fourth Extension Project, which added 1,410MW of generation capacity and has been operational since 2018. The earlier project was financed through a combination of World Bank loans and credits and was fully completed by 2023.

Beyond power generation infrastructure, the World Bank financing also supports environmental and social management initiatives, project supervision, technical assistance, independent expert reviews, and preparation of future energy projects, including pilot renewable energy initiatives.

The additional funding underscores continued international support for Pakistan's hydropower development strategy, which aims to expand low-cost, indigenous electricity generation while strengthening long-term energy security and reducing dependence on imported fuels.