KP Claims Punjab Received Larger Share Of Hydel Profits Despite Lower Generation.
✧ GENERATE BRIEFING +
The Khyber Pakhtunkhwa (KP) government has formally accused the federal administration of violating Article 161(2) of the Constitution by disproportionately distributing Net Hydel Profit (NHP) payments in favor of Punjab, despite KP generating more than 70% of Pakistan’s total hydropower. According to provincial figures, KP received Rs87.8 billion in NHP disbursements over the past three years compared to Rs160.8 billion allocated to Punjab, with specific claims that Punjab received Rs96.8 billion in the previous fiscal year alone against KP's Rs30 billion. The Power Division has strongly rejected these figures, countering that KP actually received Rs33 billion last fiscal year compared to Rs23 billion for Punjab. Federal authorities explained that disbursements are governed by WAPDA's internal resource allocation and a NEPRA-approved transfer mechanism via the Central Power Purchase Agency (CPPA-G). Meanwhile, the KP administration maintains that a total of Rs78.7 billion—comprising Rs22.6 billion in regular NHP and Rs56.1 billion in 5% indexation arrears—remains outstanding, severely tightening the province's fiscal space as it seeks a constitutional resolution.
The Khyber Pakhtunkhwa (KP) government has accused the federal government of disproportionately distributing Net Hydel Profit (NHP) payments in favour of Punjab, despite KP accounting for more than 70% of Pakistan’s hydropower generation.
According to the KP government, the province received Rs87.8 billion in NHP payments over the past three years, compared with Rs160.8 billion paid to Punjab. It argued that the distribution does not reflect the provinces’ respective shares in hydropower generation.
The dispute centres on Article 161(2) of the Constitution, which provides that net profits from hydroelectric power generation should be paid to the province where the hydropower station is located.
KP claimed that during the last fiscal year it received around Rs30 billion, while Punjab received nearly Rs96.8 billion. However, the Power Division rejected these figures, saying its records show that KP received Rs33 billion, compared with Rs23 billion for Punjab during the same period.
The Power Division said the payment figures were linked to available resources and the mechanism through which the Central Power Purchase Agency-Guaranteed (CPPA-G) transfers funds to WAPDA. It maintained that the allocation follows a mechanism approved by NEPRA.
KP has also claimed that Rs78.7 billion remains outstanding, comprising Rs22.6 billion in regular NHP and Rs56.1 billion in arrears related to 5% indexation. The provincial government warned that delayed payments are putting pressure on its fiscal position.
The province reported generating 21.4 billion units of hydel electricity in 2024-25, mainly from Tarbela, Warsak and other hydropower projects, while Punjab generated around 8 billion units.
