The government of the North West Frontier Province of Pakistan has decided to build the 80 MWe Malakand II hydropower project using public sector financing.

The contract for the construction of the hydropower plant had previously been awarded to a Canadian firm, but that deal was cancelled after the company had failed to meet its financial deadlines.

The provincial government expects to fund half the cost itself and to raise the remainder from the financial markets. It has already received 17 applications from consulting companies under the prequalification procedure for the project.