Kathmandu, September 25, 2026 (9 Asoj 2083 BS) — The 40 MW Rahughat Hydropower Project, built by Raghuganga Hydropower Limited — a subsidiary of Nepal Electricity Authority (NEA) — in Myagdi, has been connected to the national transmission system.
The project, constructed in Raghuganga Rural Municipality, began power generation from its two units of 20/20 MW capacity each and was successfully integrated into the national transmission system from Wednesday. Electricity generated by the project is being fed into the national grid via the Kaligandaki Corridor 220 kV transmission line.
As per the power purchase agreement (PPA) between the project and NEA, trial production will now be declared. Commercial power generation will begin once the 15-day trial run is completed successfully.
Background and significance
NEA Managing Director and Chairman of Raghuganga Hydropower Limited’s Board of Directors, Dirghayu Kumar Shrestha, said construction of the project had been completed through sustained effort despite challenges including difficult and complex terrain, the COVID-19 pandemic, and floods.
He noted that the project can operate at full capacity for four hours daily during the evening peak-demand period, making it a significant contributor to power demand management during the dry season. The project will generate 247.9 million units (GWh) of electricity annually, of which approximately 34 percent will be generated during the dry season.
Cost and financing
The project’s estimated cost, excluding interest during construction, stands at NPR 9.17 billion. Financing was arranged through investment from the Government of Nepal and NEA, along with a concessional loan under a Line of Credit from India’s Exim Bank.
Contractors and construction history
- Civil structure and hydromechanical works (EPC): Contract signed with Jaiprakash Associates Limited, India, on 5 Mangsir 2074 BS, effective from 10 Jestha 2075 BS
- Electromechanical works: Contract signed with Bharat Heavy Electricals Limited (BHEL) on 28 Asoj 2076 BS, effective from 18 Mangsir 2076 BS
- Construction supervision: WAPCOS Limited, India
NEA originally initiated the project with a planned capacity of 32 MW. The contract was later cancelled due to the construction contractor’s poor performance. Following this, the project’s capacity was increased to 40 MW and construction was advanced through NEA’s subsidiary company under a company model, with a fresh contract subsequently awarded.