September 5: Nepal Electricity Authority (NEA) has decided to give priority to the construction of large reservoir and semi-reservoir hydropower projects to balance the demand and supply of electricity in the country. 

NEA is moving ahead with 835 MW Dudhkoshi reservoir, 1,061 MW Upper Arun and 210 MW Chainpur Seti semi-reservoir hydropower projects. All three projects are currently in the final stages of detailed study. 

NEA Executive Director Kulman Ghising said that the detailed engineering of the three hydropower projects has been finalized, tender notices for the construction have been prepared, access roads, land acquisition, discussions with domestic investors and international donors for financial management have been taken forward hand on hand. 

"The construction of reservoir and semi-reservoir projects is being given high priority to maintain the balance between daily and seasonal demand and supply of electricity and to export excess electricity to neighboring countries," Ghising said, adding, "We are working hard to complete all the pre-construction works within a year and then begin the construction."  

Ghising said that they are discussing with the European Investment Bank (EIB), Asian Infrastructure Investment Bank (AIIB) and Korean Exim Bank for investment in Dudhkoshi, led by the Asian Development Bank (ADB) through the Ministry of Finance.

"We will raise money by issuing shares to the general public. This way the return from the project will reach to the level of citizens," he said. 

The estimated base cost of Dudhkoshi is $1.53 billion (approximately Rs. 178 billion) and the total cost including construction and interest during the construction period is estimated to be around  $2 billion. Among the studied reservoir projects, Dudhkoshi is considered to be relatively cheap and attractive in terms of cost and energy production. 

Studies have shown that the projects in Khotang, Okhaldhunga and Solukhumbu will generate 1.36 billion and 2.8 billion units of energy respectively in winter and rainy season out of 3.44 billion units of energy annually. The project has already published public notice for the construction of access road and acquisition of about 13,000 ropanis of land in Khotang area above the dam construction site. 

Ghising said that the semi-reservoir Upper Arun would be given high priority and would be promoted as a 'game changer' project. 

"Under the People's Hydropower Program, in a 4-digit input capacity (1061 MW) and the largest ever project being constructed by NEA, there will be 49 percent public shares," he said. 

The federal, province and local governments will also invest in the project. The estimated cost of the project, which can be operated at full capacity for six hours a day in the six months of winter when electricity demand is high, is about USD 1.2 billion excluding interest during the construction period. NEA plans to raise 30 percent of the total cost from self-capital and 70 percent from loans. The project will generate 4.53 billion units of energy annually. NEA has moved ahead with the 30 MW Ikhuwa Hydropower Project, which is also a project included in People's Hydropower Program, to be a part of Upper Arun.  

Chainpur Seti in Bajhang will be promoted as a game changer project in the far western region. The project to be constructed under the People's Hydropower Program will have the investment of federal, province and local governments, project affected people and ordinary citizens across the country. According to NEA, tender notices are being prepared for the construction of the project in engineering, procurement and construction (EPC) model. The project, which can run at full capacity for six hours in winter, will generate 1.16 billion units of energy annually.