Apart from the non-disbursement of pledged loans, additional foreign financing of $481 million also needed to be met, as a result, the project is facing a shortfall of Rs 72.5 billion. The contractor reportedly requested the government to make an interim arrangement of Rs 2 billion per month in addition to Rs 500 million collected through Neelum-Jehlum Surcharge for continuing work on the project till the signing of loan agreements with Exim Bank and Abu Dhabi.
The total cost of the project was estimated at Rs 84.5 billion in the PC-I with financial need to be partly met trough the imposition of surcharge of 10 paisa per unit on power used for providing 50% local component. The balance equity was to be arranged through loans, Sukuk bonds as well as $448 million from the Exim Bank of China and a $100 million from Dubai as part of the foreign component of the project.
However, the project cost rose after design changes deemed necessary in the wake of the 2005 earthquake. The project cost in the revised PC-I was estimated at Rs 274.88 billion by the Ecnec. With an installed capacity of 969-megawatts, the completion of project is considered important to overcome the prevailing energy crisis in the. About 42 % physical work on the project has so far been completed, but the financial constraints have become a major obstacle in the way of its completion.