Energy crisis is one of the major problems, which has been faced by Pakistan in past. It is the need of hour to establish a well-equipped energy sector. Environmental Impact Assessment (EIA) has reported about the relocation of nearly 30,000 people from their homes in 31 villages for the construction of Diamer Bhasha Dam. Sinking their homes, severing their socioeconomic activities of cultivation and animal husbandry and deteriorating the social structure of traditional villages and neighborhoods would have been considered as the most serious implications. A survey conducted by environmentalists suggests that the construction of dam would significantly change the environment of the area which includes relocating, submerging cultivated and rangeland, thus repudiating the essential food, economic base, particularly of local farmers, altering the natural river command through founding a reservoir with large seasonal fluctuations, river channel erosion and sedimentation. The report has suggested suitable actions to ease the substantial loss of 525,775 trees in the reservoir area through full reimbursement for the lost trees including free salvage of wood, removal of some adult trees to the new locations, if possible, re-planting of trees in new locations being followed in some large international projects. This measure can also create auspicious circumstances for the building of new houses in the model villages.