The federal government has decided to backtrack from additional power generation projects while prioritising the under-construction hydropower projects, sources in the energy said on Saturday.

Laying a new power transmission system and rectifying existing issues have become the “second priority” for the government, they said and added that no new thermal power project was likely to be set up.

This comes amid the high electricity tariffs in the country and new taxes in the federal budget.

Earlier this week, Prime Minister Shehbaz Sharif ordered officials to complete the investigation report regarding the recent closure of the Neelum-Jhelum Hydropower Project and identify those responsible for the defects in the project and take strict action against them.

Defects in the project in 2021 are also being made part of the investigation report, according to the official. Power generation was suspended in 2022 due to a fault in the tailrace tunnel of the project. Geophysical and seismic factors were also “ignored in the construction of the project and adequate concrete lining of head race tunnel was also not done.”

Sources added that the government might halt the implementation of expansion plans for power generation capacity. The under-construction hydropower projects would fulfil future electricity demand. The government had planned to add more than 17,000 megawatts of new projects by 2031.

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The country’s current power generation capacity exceeds 41,000 megawatts and upon completion of the under-construction hydropower projects the capacity would increase by more than 10,000 megawatts.

The International Monetary Fund IMF has also barred the government from constructing new power generation projects.