The Government of Pakistan has invited international bids for the $12.6bn Diamer Bhasha hydro-electric dam project.

Upon completion the dam should add 4,500MW of hydro-power to the national grid and will take seven to eight years to go into operation.

The National Economic Council (NEC) has approved $1.5bn toward the construction of the dam.

The funds which are approved by the NEC are earmarked for land acquisition, where Wapda estimates total land acquisition and re-settlement costs to reach PKR 176bn.

The government is also likely to allocate up to PKR 30bn ($375m) to the Diamer-Bhasha dam project in the upcoming Federal Budget 2009-2010.

The power generated from the project will add 30% to Pakistan’s current available generation capacity and has the potential to significantly reduce thermal power reliance and average generation cost.

The project is located in a mountainous, earthquake-prone area with potential engineering challenges.