Introduction: More than 16% of the total electricity used worldwide is met by hydropower, having local to regional environmental consequences. With positive indicators that energy is becoming more broadly available and sustainable, the world is moving closer to achieving Sustainable Development Goal 7 (SDG 7). Pakistan became the first nation to include the Sustainable Development Goals (SDGs) in its national development strategy.Methodology: The current study sought to investigate the structural limits of Environmental Impact Assessment (EIA) guidelines for hydropower development in Pakistan. The study included the document review of the EIA reports about hydropower projects in Pakistan, scientific questionnaires from decision-makers, and public consultation.Results and Discussion: The document evaluates that an adequate mechanism is available, and donors like the Asian Development Bank and World Bank observe the implementation process of EIA in Pakistan. However, a comprehensive analysis of the EIA system found several things that could be improved, not only in the institutional framework but also in actual implementation and practices. More than 20% of respondent decision-makers disagreed with the compliance of the current Institutional Framework with EIA guidelines, and 25% think that the existing guidelines followed in Pakistan are not aligned with international standards and practices for Hydropower in actual practice. EIA has a limited impact on decision-making due to insufficient technical and financial resources.Recommendations: There should be a think tank with experts who can meet the needs of present and future epochs. The public should be communicated with and educated about EIA. For better efficiency, the officers and decision-makers should be trained internationally, i.e., the Water and Power Development Authority (WAPDA).