By Moaaz Manzoor

The final Public Sector Development Programme (PSDP) allocation for the Ministry of Water Resources has been reduced by Rs75.91 billion to Rs103.09 billion for FY2026-27, compared with the ministry’s proposed development envelope of Rs179 billion.

According to documents available with Wealth Pakistan, the reduction amounts to approximately 42.4% of the proposed funding for water and hydropower schemes. The number of approved projects has also declined from 45 under the proposed programme to 43 in the final allocation.

The final development envelope includes Rs28.17 billion for hydropower projects and Rs74.92 billion for water-sector schemes. Under the original proposal, hydropower projects were expected to receive Rs43.17 billion, while water-sector schemes had been allocated Rs135.83 billion.

The revision therefore reduced the hydropower component by Rs15 billion and the water-sector component by approximately Rs60.91 billion.

The final PSDP allocation is almost evenly divided between domestic and grant-supported financing. It comprises Rs51.45 billion in rupee cover and Rs51.64 billion in grant funding, according to the ministry’s briefing documents.

Within the reduced development envelope, funding remains concentrated in a limited number of projects. Six projects have been allocated Rs66.07 billion, accounting for approximately 64% of the ministry’s total PSDP allocation.

Another nine projects will receive Rs15.04 billion, or about 15% of the total, while the remaining 28 projects will share the balance of approximately 21%.

The distribution differs substantially from the ministry’s original proposal. Under the proposed Rs179 billion programme, six projects are expected to receive Rs114.77 billion, while another nine schemes have been earmarked Rs26.53 billion. The remaining 30 projects are to receive the balance.

This means the final programme not only carries a smaller overall development envelope but also covers fewer approved schemes, increasing the need to concentrate available resources across the ministry’s priority portfolio.

The Rs103.09 billion allocation will finance 43 approved hydropower and water-sector projects during FY2026-27 and will form the core of the Ministry of Water Resources’ development programme for the current financial year.

Credit: INP-WealthPk