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Hydropower Projects of Nepal : Its Potential and Present Situation

Hydropower Projects of Nepal : Its Potential and Present Situation

Nepal’s fifty eight years of development planning efforts has produced for less than 2o% of population with an access to electricity in Nepal and even those who have access have to live with huge power cuts every day.  Over six thousand perennial falling rivulets can be tapped from several places for small to large Hydropower generation, irrigation and drinking water purposes. There is ample possibility of exporting of Hydropower and water for both drinking and irrigation purposes but Nepal has been facing the ill-fate due to various reasons. Nepal has been able to generate only 1044.6 MW (Economic Survery, 2074/75) of electricity in 100 years. Nepal having sufficient natural resources to produce and supply electricity not only to India but also entire SAARC region, itself suffers due to heavy load shedding.

NEA is concentrating on solving the power crisis that commissioning the Chamalia, Khulekhani-3, Trishuli-A and B and Rahughat Projects in the next five years. The Budhigandaki (600Mw) will start its work very soon.

Due to the political hurdles in the smooth development processes of all kinds of Hydropower projects are lagged behind. The Hydropower projects have been badly affected by party politics and vested interests of the bureaucrats, politicians, and mafia. The present power crisis, the shortage of potable fresh water and pollution of all types, price hikes, adulterations and the law and order problems, all are due to party politics. There is no difference between the autocratic and the multiparty political systems. In the century long autocratic family rule only two small hydro power projects, Farping and Sundarijal were completed. These two projects, both are in Kathmandu, produced 1.4 MW.

In the panchayat democracy, the Hydropower Projects of various capacities were established . This political regime electrified all the towns and districts headquarters, for the first time taking such services out of Kathmandu valley. The immediate requirements were met by diesel plants and at the same time the Hydropower projects were also implemented in several places during the first two decades of plan periods. A total of 32021 KW was produced to meet the immediate requirements . Those projects are the Panauti, Trisuli, Sunkoshi, Devighat, Koshi, Gandak (Surajpura) Kulekhani, Pokhara and Phewa Hydropower projects were completed during that era, which added 131400 KW of power for consumption by the people. At the same time small Hydropower project concept was developed and a number of projects were completed. Among them are Dhankuta (Banchare), Phidim, Gorkhe, Dhading, Thansing, Jomsom, Shyanja, Baglung, Jhuprakhola, Doti, and Jumla are mentionable. Since then, the project in the pipeline expected to be commissioned within the next 7 years were Kulekhani II & III, Chamelia, Upper Trishuli,-3 A& B, Rahughat, Upper Tamakoshi, Upper Seti(127 MW located at Damauli) and other private sector projects having a total capacity of 1245MW.

The Hydropower projects scenario of the projects completed, ongoing and in the pipeline are briefly indicated as mention below:

  • Kaligandaki -A Hydro power Project;

The Kaligandaki –A project was completed with much hue and cry as being an expensive project. The kaligandaki –A, with an installed capacity of 144 MW, generates 760.241 GWh. It is natural that any project is expensive when there is an entry of any first world nation as a donor, as a consultant or as a contractor. The total estimated cost of this project was US $ 360 million. The contractor of this project was Imprejilo SPA.[1]

  • Middle Marshlandi Hydro power Project;

The Madhya Marshlandi Hydropower Project near Lamjung the district head quarters is a peaking run-off river project with an installed capacity of 70 MW power productions. This has now been completed with a strong and bitter experience. Started in 1999 with the target of it being completed in 43 month i.e. early 2003, this could not be done. The project cost and time has increased. Ultimately the project was completed on December 2008, five years later than the estimated period. The total project cost was NRs. 30 arab, 17 crore and 40 lakh, which is more than double of the estimated cost. It is due to the entry of the capitalists of the first world and the corrupt minded political parties at the decision making bodies that such a situation was created at the loss of the nation and the people. The contractor of this project was DDC- JV. [2]

  • The Khudi Hydro power Project;

The Khudi Hydropower project of 4 MW (annual 25 million units) is a middle level project invested in by the private sector. This is an important project after Khimti, Bhotekosi, Chilime, and Indrawati.NEA agrees to purchase power from this project at threat of Rs. 4 per unit. Its production cost is US $1800 Per KW. The Nepali investors are Rastraya banijya Bank, Investment, Siddhartha and Machhapuchhre Banks.  [3]

  • Arun III Hydro power Project;

Arun III, as the run- of- river project with daily peaking capacity was identified as one of the most economic and attractive schemes. The 402 MW project was estimated to cost US $ 550 million. In 1985 pre-feasibility study was completed and in June 1987 the final feasibility study of the project was finished by NEA. In May 30 1989, the World Bank approved credit 2029 –Nepal. The ICFC, a group of WB was supposed to finance a share of 25%.[4]

  • Upper Trisuli III A Hydro power Project;

This project is being implemented by NEA as a priority project. This is a run-of-river system with a capacity of 60 MW and it is located in Nuwakot and Rasuwa Districts. The estimated cost of the project is US $ 125.75 million of which China will provide a loan of US $ 120 million.  [5]

  • Budhi Gandaki Hydro power Project;

The project was located between Benighat of the Prithivi Highway and Arughat Bazaar 2 km away through Shyurintar. The high of the dam would be 225 meters. A zoned rock filled dam with inclined core was proposed to create the reservoir. The reservoir would be 40 km long from the dam axis area and 15 km along Ankhu Khola having gross capacity of the reservoir of holding 3320 million cubic meters of water. The project would generate 600MW electricity (2495 GWh annul energy) with downstream benefit of regulated flow in the dry season. The cost of project was US $ 774 million at 1983 prices.[6]

  • Karnali Hydro power Project;

The Karnali Hydro Power Project probably was the first largest project to be planned by the than Panchatyati Government to provide suffice electricity for Nepal and to export power to India. The government produced one thousand engineers and medical doctors for the sake of this project so that it could be fully run by the Nepali manpower. India during Indira Gandhi’s regime had agreed to purchase the excess power from Nepal. The World Bank had agreed to finance the project. There was anxiety to India regarding the lower riparian rights of water resources. Finally India started grumbling against the project. India concluded that the main switch of the power must be installed in India. Even the power to be used by Nepal would be under the control of India. King Birendra did not agree with this concept as resultant this project was postponed.[7]

  • The Upper Karnali Hydroelectric Project;

The license for the 300 mega watt Upper Karnali hydroelectric project was given to India in the name of GMR Energy Ltd. The company was supposed to complete the project in 54 months. Nepal would receive 27% share and 12% energy free of cost. The company would pay export tax to the government at the rate of 0.005 %. The Upper Karnali Chisapani Project’s main construction sites are based in Surkhet, Dailekh, and Achham districts. International Finance Corporation (ICFC) is supposed to finance a share of 25%.[8]

  • The West Seti Hydro power Project;

The West Seti is the country’s largest (750MW) reservoir power project. The 750 MW project site lies in Doti District. The project’s construction time period is estimated to take five and half year. The Asian Development Bank (ADB) made a proposal to the government for the latter’s 15 percent equality participation in the 750 MW West Seti Project. However, the financing to the project will be met by the Seti project by 26%, W Bank by 25%, CMEC (China) by 15%, IOL/IS by 15%, Nepal by 15%, and SPV by 14%,. A company is being registered in Hong Kong to run the project between SMEC, ADB and Chinese investors.[9]

  • Upper Marsyangdi II Hydro power Project;

This project was suspended due to disturbances created by Maoists. This project site is located at Taghring of Lamgung, while the dam will be constructed at Taal village of Manang. A tunnel will be connected between Taal Village and Taghring village. The tunnel will be 11.2 km long. The project generation capacity is 600 MW. Maoist had obstructed the work in the project in the month of Falgun 2067 BS. The Maoist had alleged that the project was started by the Indian company without confirming the rights of the local people. A 260 meter long test tunnel has already been completed. The project has affected 60 families of Tall Village  [10]

  • Upper Seti Hydro power Project;

The Upper Seti is a Hydropower project having 127 MW capacities. Its detail survey was carried out by JICA. A bank of Japan will provide a loan of $ 250 million at 1% interest to implement the project. The estimated cost of this project is $1900 per M. It is a reservoir based project, which is good for peak hour demand of electricity. But sadly the project has not been started by due to inefficient, commission oriented, non-nationalistic and lethargic attitude of the government. [11]

  • Tamakosi Hydro power Project;

The government had issued a survey license for the Tamakosi II (207 MW) and Tamakosi III (275MW) projects to the Norwegian Company Stat Craft Norfund (SN) allowing it to initiate work on Tamakosi I & II Hydropower projects. The company was asked to finish the feasibility study and Environmental Assessment Work within a period of two years, effective from the date that the survey license was issued. The company aims to complete the projects within 5years. Tamakoshi III will be developed as a reservoir type project with a capacity of 350 MW, while Tamakoshi II will be of 275 MW capacities.[12]  

  • Tamakosi II & III Hydro power Project;

The Norwegian Stat craft Norfund (SN) has applied for the 482 MW Tamakosi I & II. The Tamakosi I is of 275 MW while the Tamakosi II is of 207 MW. It has proposed that Nepal can purchase as much as it need and the remaining will be sold to PTC India is not a bad proposal. The bad may come there while making an agreement and whole violating the national main policy on water resources. [13]  

  • The Tamakosi Area Project;

The Tamakosi area in the Dolakha district have projects that are all run of the river nature like the Upper Tamakosi (456MW), Tamakosi-2 (660MW), Sipring Khola, Kahare VDC (10MW), Singati Khola (6.4MW) Khare Khola (14MW), Khimti-2 (27MW). These projects have a total capacity of producing 1173.4 MW of power; have a connection of 63 km long tension lines and approach roads. The total cost of these projects is 3,529 corers of Nepali Rupees.[14]

  • Sunkosi Hydel Project

The Sunkosi Hydel Project (SHP), a Government owned project has lowered its power generation capacity to give way to the expensive power produced by the private Hydel project. The SHP had started lowering its power generation since the last three years, after power generated from Sanima that flow down from Tibet and Hydel Centre (CHC) and Chaku Hydel Project (CHP) were connected to its 10.05 megawatts capacity grid.[15]

  • Bhote Kosi Hydro power Project;

The Bhote Koshi River is considered to be one of the steepest and most powerful rivers is one of the most popular rivers in the world for rafting as 80 companies run their action packed trips on this river and 70% of rafting tourists enjoy white water rafting on this river. [16]

  • Phawa Khola power Project;

The Nepal Electricity Authority (NEA) has signed a Power Purchase Agreement (PPA) for Phawa Khola Hydropower Project of 2079 KW, to be developed by Shivani Hydropower Company. NEA will receive electricity at the rate of NRs. 5.52 per unit during dry season and Rs. 3.90 per unit during the wet season. The project located in Taplejung district will be completed in 3 years with an investment of 300 million rupees. [17]

  • The Mahakali / Tanakpur Hydro Project;

The Mahakali Treaty was agreed upon one midnight in the year 2052 BS, but with great hue and cry from those who opposed it. Great concern was shown by the Western countries in regard to this project.
The second wake-up call was the Tanakpur / Mahakali episode that tried up the Supreme Court of the country, the press and the parliament for the first half of the 1990s. The Tanakpur fiasco was subsumed under the much bigger Mahakali Treaty, which included the implementation of the Pancheswar Project, possibly the highest dam of its type in this part of the world to generate over 6000 MW electricity. The treaty was ratified by over Two-Thirds majority in the parliament in September 1996, despite fierce opposition by activists and nationalist politicians. Todays, one and half decades after that episode, far from seeing the completion of Pancheswar, the DPR of this ambitious plan.[18]

  • Khimti II Hydro Project

Khimti II has a capacity for generating 75 MW of power, which NEA can implement and also run by itself. By means of efficiency development of khimti -I NEA can add another 50MW of power generation capacity in this project.[19]

  • Chamelia Hydro  Project

Chamelia lies on the tributary of the Mahakali River in Darchula district. This project is a six hour daily peaking run-of-river scheme with an installed capacity of 30 MW of power, expecting to generate 184.21 GWh of energy annually. The 18 km long access road and 131 km long 132KV transmission line has already been completed. The project is being constructed with funds from the loan agreement of $ 45 million mad e with the Korean government. [20]

  • The Upper Tamakosi Hydro Project

The Dolkha-based Upper Tamakosi project with an installed capacity of 309 MW is designed to generate an annual 1737 GWh of electricity. This can be taken as a milestone in the history of power generation. This is the only project, when the NEA solely holding the license for it, as per the will of the Nepali People. It will undoubtedly alleviate the present power crisis and improve the financial condition of NEA. NEA neither carried out a first stage detailed feasibility study in 2001 on the master plan made by JICA in 1985 and DPR by nor consults in May 2005. The 28.5 km Singati-Lamabagger access road and seven different bridges have already been constructed. [21]

  • Kulekhani III Project

The 14 MW Kulekhani III, a cascade project is under construction and it will be completed by 2013 and will generate 40.85 GWh of power annually. The project has been put as a national priority project. The estimated cost of the project is NRs 2.43 billion. It is funded by the government and the NEA, without any funds from outside the country and thus it will have no alien influence. This is exactly what Nepal has to do in all Hydropower Projects.[22]

  • Pancheswor Power Project;

The pancheswor project (6480MW from storage project and 240MW from re-regulating dam) would probably have been built and commissioned by now. By getting Nepal to sign on the dotted lines in the treaty document, India succeeded in legitimizing the use of water in excess of what she is entitle to (50% of the water in Mahakali- deemed to be a border river), which she had been illegitimately using prior to the execution of the Treaty. And it is also not that difficult to see that she is in no hurry to get this project commissioned. The project is to be completed with the joint investment of Nepal and India. TThe two nations have already agreed to organize a Pancheswor Development Authority (PDA). The project will displace 2,926 families of Nepal and almost a similar number of families in India. [23]

  • SaptaKosi High Dam Hydro power Project;

The Saptakoshi High Dam study is so far completed just by 20%. This project is for hydro power generation, flood control and for irrigation. There will be 279 meter high dam somewhere near BarahKshetra religious area. It is said that it is being delayed due to Maoists’ interests. The DPR may be completed till last 2013. The major chunk of benefits goes to India. Therefore, India must agree to pay for the fresh water that uses for irrigation at the rate of it charges to its farmer in addition to the electricity and irrigation shares of Nepal. The energy produced from the project will be exported only when it becomes excessive for the needs of Nepal and this is one of the positive components of this project. The H Group Inc. consist of 4 other renowned companies namely the Energy Market Group (EMG), Energy Hays Fund Group, Ossiant Group, F-3 Energy and Overseas Private Investment Company (OPIC) etc.[24]

  • Kabeli Hydro power Project;

The Nepal government has already invited proposals from interested national and international power companies for the Kabeli Hydropower project. The World Bank is ready to invest in the 30 MW Kabeli Hydropower project. And four power companies have submitted their proposals. The selection of a company on the basis of chief power purchase agreement, will receive 40% of the total investment as loan through PDF. The Kabeli project will require $ 60.5 million for its completion and the unit cost of electricity is $ 3,000 per unit. [25]

  • Tamor High Dam Hydro power Project;

An American company named Hillsdale Group Inc. has applied for permission the Tamor High Dam Project at the Tamor River running between Panchthar and Terathum district will have a high dam at Mauba and Panchkanya pokhari VDCs. The dam will be 150 meters high and 590 meter width. The total estimated cost is NRs. 568 billion. A public company will be established in Nepal so that any Nepali can purchase shares. The project will generate over 7000 direct employment and thousand indirectly. The H Group Inc. consist of 4 other renowned companies namely the Energy Market Group (EMG), Energy Hays Fund Group, Ossiant Group, F-3 Energy and Overseas Private Investment Company (OPIC) etc.[26]

Reference and Works Cited
[1] PANT, Supra Note, 114, at  83.
[2] Ibid, at   84.  
[3] PANT, Supra Note, 114, at 92.
[4]Ibid , at 94. 
[5]  Id.
[6] Ibid, at  96. 
[7] PANT, Supra Note, 114 , at  98.
[8]  Editor,THE KATHMANDU POST , (April 30, 2007)
[9] PANT, Supra Note, 114, at 98.
[10] Ibid, at  107.
[11] THE KATHMANDU POS ,(FEB26 2007).
[12]PANT, Supra Note, 114, at 109.
[13] http:// www. Nepal News .com, (August 29, 2010).
[14]PANT, Supra Note, 114, at 110.
[15]  YUVA RAJ PURI, http:// www.the Himalayan Time.com/ (November 26, 2006)
 [16] PANT, Supra Note, 114, at 111.
[17] Ibid,  at  112.
[18] PANT, Supra Note, 114, at 112.
[19] Ibid,  at 112.
[20] PANT, Supra Note, 114, at  88.
[21] Ibid, at  89.
[22] Ibid , at  88.
[23]PANT, Supra Note, 114,  at 114. 
[24] Ibid, at 138.  
[25] KANTIPUR DAILY  (Feb. 2007).
[26]PANT, Supra Note 114, at  115.

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