Agreement reached to start construction of Upper Arun, Dudhkoshi hydel projects


Kathmandu, Apr. 12: The government and the main financial managers of Upper Arun and Dudhkoshi hydel projects – World Bank and the Asian Development Bank – have agreed to start the project construction work quickly.

In a meeting held at the Ministry of Finance on Thursday among Minister of Finance Asian Development Bank, Minister of Energy Water Resources and Irrigation Shakti Bahadur Basnet, Revenue Secretary of the Ministry of Finance  Dr. Ram Prasad Ghimire, Energy Secretary Sushil Chandra Tiwari, Managing Director of Nepal Electricity Authority Kul Man Ghising, World Bank’s Country Director for Nepal, Maldives and Sri Lanka of World Bank Faris Hadad-Zervos (virtually) and ADB’s Director of Asian Development Bank Arnaud Cauchois have agreed to speed up the construction work by completing the financial management of both the projects.

There was a detailed discussion about project financing management and capacity building for project implementation, according to a press statement of the Ministry of Finance.  In the discussion, a presentation was made about the work completed for the preparation of both the projects.

The construction process of   the 1,063 MW Upper Arun Hydropower Project to be built in Bhot-khola Rural Municipality of   Sankhuwasabha as a ‘game changer’ project has advanced.

It has been decided to construct the project through a subsidiary company of the Nepal Electricity Authority with the mixed investment of   the World Bank’s concessional loan and domestic banks and financial institutions.

Similarly, there is a plan to build a reservoir on the Dudhkoshi River and generate 635 megawatts of   hydropower at Lamidanda of Rawabesi Rural Municipality-3 in Khotang and Rabuwaghat of Chishankhugadhi Rural Municipality-6 in Okhaldhunga. Under the leadership of   the Asian Development Bank, the project is going to be constructed with the investment of the World Bank, Citizen Investment Trust and the general public.

There is a plan to raise 70 per cent loan investment from the organisation and 30 per cent from equity.

Upper Arun Hydro-Electric Limited, a subsidiary of Nepal Electricity Authority, promoter of the project, has said that the construction of the project will start from the beginning of 2026.

An estimated time limit of five years has been fixed for the construction of the project.  The construction of 2-km tunnel and 21-km access road has progressed in preparation for Upper Arun Hydropower Project. Land acquisition and distribution of compensation is almost over.

Source: Rising Nepal