Status: Approved
Timeframe: 2021-2028
Area: Pakistan, Khyber Pakhtunkhwa Province, Mansehra District
AIIB Investment Amount: 250 million USD
Total Project Cost: 755 million USD
Co-financier: ADB, Government of Pakistan
E&S Category: A
Project details:
The project aims to enhance energy security and expand renewable energy in Pakistan through the construction of a 300 MW run-of-river hydropower plant on the Kunhar River in Khyber Pakhtunkhwa. The objective is to increase clean energy capacity, support local economic development, and promote climate resilience and gender-inclusive community training programs.
Project Concerns: (comprised finding from CSO factsheet linked below)
Resettlement
Over 2,200 people face resettlement, with payments delayed or denied due to bureaucratic issues and discriminatory practices, particularly affecting women and vocal community members. Tunnel blasting has damaged homes and infrastructure, yet no compensation is provided for these indirect but severe impacts. Communities resisting land acquisition have faced threats, coercion, and even violence. Families report harassment, beatings, and arrests for voicing opposition. FIRs have been filed against protestors, and some were imprisoned under false charges.
Social
Community-owned irrigation water sources have been diverted for construction, undermining food security and local farming systems.
Grave labor violations have been reported: no written contracts, sub-minimum wages, and unsafe working conditions. One worker died and others were seriously injured due to a lack of emergency medical care at the site. Despite these incidents, the site lacks full-time medical staff, and an ambulance is largely non-functional. Local laborers attempting to organize have faced intimidation, with union rights ignored.
Environmental
Significant environmental risks stem from the project’s location in a highly sensitive and disaster-prone region. Construction has contributed to deforestation, slope destabilization, and drying up of water springs. The area faces heightened risks of landslides, earthquakes, and flash flooding, worsened by poorly planned infrastructure and muck (tunneling waste) disposal. Only one of ten proposed waste sites is environmentally feasible, leading to improper dumping and contamination of rivers and slopes.
Organization monitoring: Indus Consortium
Further information: AIIB Page, CSO fact sheet
Last update: 13.08.2025