The government has started the necessary discussions to decide the structure of construction and financial management of the Budhi Gandaki hydropower project, which is a project of national pride.
Following Prime Minister Pushpa Kamal Dahal’s directive to expedite the necessary work for the project’s construction, the Ministry of Energy, Water Resources, and Irrigation (MoEWRI) has initiated phased discussions. The total capacity of the Budhi Gandaki project is 1,200 megawatts.
The Council of Ministers has already decided to allocate Rs 5 per liter from the infrastructure development tax levied on fuel for the construction of the Budhi Gandaki Hydropower Project. Likewise, the work of distributing the compensation has also reached its final stage. The government has prepared to start the construction of the project in the current fiscal year itself.
A discussion was held in the MoEWRI on Friday with the aim of making an immediate decision regarding the financial and construction framework for the construction of the project. Energy Minister Shakti Bahadur Basnet instructed Jagat Shrestha, Chief Executive Officer (CEO) of Budhi Gandaki Hydropower Company, to immediately decide on the share structure.
Additionally, for internal investment, the minister directed discussions with the Employee Provident Fund, Citizen Investment Trust, banks, financial institutions, Nepal Telecom, and other institutions to calculate the investable amount.
The Minister also instructed to select an international-level consultant and appointment of the project manager for the project management. The government is prepared to fund the project through domestic investment. A decision is pending on whether the compensation already distributed will be deemed government investment, making the project financially viable, or if alternative options will be explored. The affected local residents of Dhading and Gorkha have been requesting to speed up the project immediately.
The government has also established an office in Siurenitar of Gandaki Rural Municipality of Gorkha, where the project is located. Minister Basnet directed CEO Shrestha and the high officials of the MoEWRI to make the necessary preparations on an urgent basis and submit them at the next meeting along with the action plan.
The estimated total cost of the project, as per the latest revised details, is Rs 380 billion, with Rs 73 billion allocated for compensation, restoration, and rehabilitation.
The government has anticipated that resources equal to Rs 180 billion will be available from petroleum products alone. According to CEO Shrestha, it will be easier if the government keeps the amount spent for compensation and rehabilitation in the ‘Viability Gap Fund’ and takes necessary decisions.
Minister Basnet requested the related authorities to make necessary preparations to start the construction of the project immediately, as the budget will be provided gradually and a large amount of money will not be required at once.
It is estimated that the construction of the project will take about eight years. It seems that investment can be raised from internal sources within that period. Similarly, a working group formed by the government has recommended that an amount equal to Rs 35 billion can be taken as a commercial or subsidized loan.
CEO Shrestha assures that the project can proceed immediately after studying all relevant studies and reports conducted by the working group so far. Similarly, Joint Secretary of the MoEWRI Nabin Raj Singh stated that there are no issues with the project management.
In the discussion, Gopal Sigdel, secretary of the MoEWRI, said that the demands of local residents should be addressed according to the law as well as personnel management, suitable methods of investment and share ownership should be decided immediately.