Nepal is one of the countries rich in water resources. Thousands of rivers and streams originating in the Himalayas offer the country immense potential for hydropower generation. According to various studies, Nepal is estimated to have around 42,000 MW of economically exploitable hydropower potential. Effectively harnessing this potential could contribute not only to energy self-sufficiency but also to industrialisation, job creation, balanced regional development and the development of a green economy.
At a time when the Government of Nepal is prioritising clean energy development, various hydropower projects are being developed through partnerships between the private sector and public institutions. Among them is Jagdulla Hydropower Company Limited, established under the Ministry of Energy, Water Resources and Irrigation’s People’s Hydropower Programme. It is the first company in Nepal established with 51 per cent founder shares held by government bodies, including the Karnali Provincial Government and local governments, and 49 per cent shares held by the general public.
The company is developing the 106 MW Jagdulla semi-reservoir hydropower project on the Jagdulla River, which flows from Jagdulla Lake, located at an altitude of approximately 4,300 metres in Jagdulla Rural Municipality, Dolpa, a remote district of Karnali Province. The project is highly significant not only for Karnali Province but also for Nepal’s national energy development.
Under construction on the Jagdulla River, which flows through Jagdulla and Mudkechula rural municipalities in Dolpa district, the project is expected to make a long-term contribution to local infrastructure development, economic prosperity, job creation, social transformation and sustainable development, alongside electricity generation. It is also expected to create new development opportunities in the remote Karnali region and serve as an important means of connecting local communities with the mainstream of national development.
Importance of the Project
Reliable and clean energy is essential for Nepal’s economic development, industrialisation and social transformation. Nepal, which is rich in water resources, has consistently prioritised hydropower development as a key national sector. In this context, the Jagdulla peaking run-of-river (PROR) hydropower project in Dolpa district, Karnali Province, is an important undertaking in Nepal’s energy development journey.
Jagdulla Hydropower Company Limited, based in Kathmandu, is the project developer. The detailed engineering studies were carried out by NEA Engineering Company Limited, which has Nepali experts. The project is also notable as a government-led project financed through approximately NPR 16.66 billion in loans from Nepali banks and financial institutions, including Nabil Bank, the Employees Provident Fund, Hydroelectricity Investment and Development Company Limited (HIDCL), Laxmi Sunrise Bank, Everest Bank and NIC Asia Bank.
The project has an installed capacity of 106.52 MW and aims to generate approximately 623.32 gigawatt-hours (GWh) of electricity annually.
Although the project is located in the remote Himalayan region of Karnali Province, it is highly significant in terms of its design, structures and technology. The high-head project will utilise a gross head of approximately 789.60 metres. Electricity will be generated using three vertical-axis Pelton turbines, each with a capacity of approximately 35.33 MW.
In addition to generating clean energy, the project is expected to play an important role in local infrastructure development, job creation, the expansion of economic activities, skills development and the overall socioeconomic transformation of the Karnali region.
In today’s world, energy is the backbone of a nation’s economic development. The availability of reliable, clean and affordable energy directly affects every sector, including industry, agriculture, tourism, information technology, education and healthcare. As hydropower is an area in which Nepal enjoys a comparative advantage, its sustainable development is directly linked to national prosperity.
Some of the key reasons why the Jagdulla semi-reservoir hydropower project is particularly important are as follows:
– Add 106 MW of clean energy to the national electricity system.
– Accelerate energy and infrastructure development in Karnali Province.
– Expand employment and income-generating opportunities for local communities.
– Increase revenue and royalty income for local governments.
– Contribute to national energy security through investment by the private sector.
– Help mitigate climate change through green energy generation.
Successful implementation of the project is also expected to create a favourable environment for the development of additional hydropower and infrastructure projects in Karnali Province.
The project has completed its preparatory work, including detailed engineering studies, environmental studies, land acquisition, financial arrangements, the power purchase agreement (PPA), the generation licence and industry registration. The contractor selection process for Lot 2, covering civil and hydromechanical works, has also been completed, and the contract agreement was signed on 11 August 2025.
On 2 July 2026, the Honourable Minister for Energy laid the foundation stone for the project and inaugurated the Bailey bridge and main camp constructed by the company. The project is moving forward with the target of commencing electricity generation within the next four years and six months.
Project Highlights
– The company has constructed a permanent bridge measuring 100 metres in length over the Bheri River at the project site. It has also opened a road through approximately five kilometres of steep terrain along the access route from Tribeni through Mudkechula to Jagdulla Rural Municipality, using explosives. Installation of 10 Bailey bridges along the access road is nearing completion. These infrastructure improvements will benefit not only the project but also residents of the two rural municipalities, helping eliminate the long-standing need to walk for approximately 12–14 hours to reach certain destinations.
– Until around three years ago, travelling from Nepalgunj to Dolpa took at least three days, and travel was often impossible during the rainy season. Improved access has now made it possible to reach Dolpa in a single day. The project’s coordination efforts have also helped create conditions for the operation of night buses between Dunai, the district headquarters of Dolpa, and Kathmandu.
– The project is also expected to promote tourism by providing a shorter route from Kathmandu to Rara Lake, Shey Phoksundo Lake, Jagdulla Lake, Upper Dolpo, Jumla and Mugu.
– Local agricultural and herbal products, including apples, walnuts, shilajit, saffron and medicinal herbs such as yarsagumba, wild garlic, chiraito and white sugar-like medicinal herbs known locally as seto chini, are expected to gain improved access to markets. This is expected to contribute to economic transformation in the region.
Following completion of the project, the upper project alone is expected to provide annual royalties of approximately NPR 195 million to the federal government, NPR 95 million to the provincial government and NPR 95 million to local governments. These revenues are expected to begin contributing to government coffers in around five years.
– Ten per cent of the company’s shares have been allocated to local residents under the general public shareholding category.
– For the first time in Nepal, the company has structured its shareholding to allocate 3 per cent of general public shares to landowners whose land falls within the right-of-way of the transmission line to be constructed.
– By developing a hydropower project in a remote district of Karnali Province, the initiative is expected to encourage other power generation companies to invest across the province and contribute to national electricity generation.
Economic Opportunities During Construction
Large infrastructure projects have a direct impact on local economies, beginning with the construction phase. Building a project of this scale requires substantial labour, construction materials, transportation, food supplies, accommodation, communication facilities and various other services. This stimulates local markets and significantly expands economic activity.
During construction, local young people can find employment as skilled, semi-skilled and unskilled workers. Prioritising local labour not only increases household incomes but also helps workers develop technical skills that can be applied to future hydropower and infrastructure projects. Such skills can play an important role in creating long-term employment opportunities.
Similarly, demand for locally produced agricultural goods, dairy products, vegetables, meat, fruits and other consumer goods is likely to increase during construction. Local traders, hotels, restaurants, transport operators and small entrepreneurs can benefit directly from the resulting economic activity. In this way, the project has the potential to bring about substantial improvements in the local economy.
Infrastructure Development Opportunities
Infrastructure development in a remote Himalayan district such as Dolpa is itself a major achievement. The expansion of access roads, bridges, construction camps, communication facilities and electricity supply systems required for the project will provide long-term benefits to local communities.
With improved road access, local farmers will be able to transport their produce to markets more easily. Travel time for taking patients to healthcare facilities will decrease, and students will have better access to schools and higher education. Public service delivery is also expected to improve.
Infrastructure development will create new opportunities for local tourism. Dolpa’s natural beauty, religious heritage and cultural diversity have the potential to attract domestic and international visitors. Improvements in road and energy infrastructure could therefore make an important contribution to the expansion of the tourism industry.
Capacity Development of Local Communities
The sustainability of a project is not limited to infrastructure construction alone. Developing the capacity of local communities is equally important. Skills development training, business development programmes, technical training and entrepreneurship promotion initiatives implemented alongside the project can help local people become self-reliant over the long term.
In particular, providing young people with training in welding, electrical maintenance, machinery operation, construction management, computer skills, safety management and other technical fields would enable them to remain competitive in national and international labour markets even after the project is completed.
By expanding income-generation programmes targeting women and disadvantaged communities, promoting cooperatives, supporting small businesses and creating self-employment opportunities, the project could become an outstanding example of inclusive development.
The Project’s Role in Social Development
A hydropower project is not merely a means of generating electricity; it is also a partner in social development. Corporate social responsibility programmes implemented under the project can make significant contributions to education, healthcare, drinking water, sanitation, women’s empowerment, sports and community development.
Support for school construction, scholarship programmes, health camps, ambulance services, safe drinking water, community buildings and disaster management can directly improve the living standards of local communities. Such initiatives also strengthen trust, cooperation and a sense of ownership between the project and the local population.
For this reason, modern hydropower projects are increasingly being recognised not only as electricity-generating infrastructure but also as instruments of social transformation.
Environmental Impacts: A Sustainable Development Perspective
Hydropower is widely recognised as a major source of clean and renewable energy worldwide. Compared with energy generation based on thermal fuels, hydropower significantly reduces greenhouse gas emissions. However, any large infrastructure project can have certain direct and indirect environmental impacts during construction and operation. Therefore, a project’s success depends not only on electricity generation but also on the effectiveness of its environmental management.
During the construction of the Jagdulla semi-reservoir hydropower project, activities such as access road construction, tunnel excavation, extraction of construction materials, equipment operation and transportation may generate dust, noise and vibrations. As these activities can temporarily affect the surrounding environment, construction work must be carried out in accordance with approved environmental standards.
Particular care must be taken during construction to prevent soil and other construction materials from entering the river. Scientific management of waste, sewage and other pollutants generated by construction camps can help protect water quality. In addition, the safe storage and handling of fuel, lubricants and chemicals can help minimise the risk of pollution.
Biodiversity Conservation
Dolpa district is an ecologically sensitive area with rich biodiversity. Its forests, river systems, grazing lands and Himalayan ecosystems provide habitats for a wide variety of plant and animal species. Therefore, biodiversity conservation must be given high priority alongside project development.
Compensatory afforestation, plantation of native species and forest restoration programmes can be implemented in forest areas affected by the project. Construction activities should be confined to designated areas to prevent unnecessary forest destruction. Construction work should also be carried out in ways that minimise disruption to wildlife movement, with special conservation plans introduced in sensitive areas where necessary.
Maintaining environmental flows is particularly important for preserving the balance of the river ecosystem. This helps protect the natural life cycles of aquatic organisms, especially fish and other aquatic species.
Social Impacts and Local Communities
The success of any hydropower project ultimately depends on the trust and participation of local communities. During construction, the arrival of workers from outside the area, new economic activities and infrastructure development can bring various changes to local society. Although these changes may be positive, appropriate social adjustment is necessary.
It is essential to implement the project while respecting local cultures, traditions, religious beliefs and community values. Regular dialogue with local communities, public consultations, information sharing and participatory decision-making can strengthen trust between the project and the community.
If the project affects any households, agricultural land or livelihoods, appropriate compensation, resettlement and livelihood restoration programmes must be implemented effectively in accordance with applicable legal provisions and approved resettlement plans. This will help ensure social justice and long-term sustainability.
Measures to Mitigate Environmental and Social Impacts
In modern hydropower projects, an Environmental and Social Management Plan (ESMP) is considered essential. It provides for the continuous monitoring and management of potential impacts throughout the construction and operational phases.
The following measures can be effectively implemented in the project:
– Regularly spray water at construction sites to control dust.
– Carry out regular maintenance of construction equipment to minimise noise and exhaust emissions.
– Ensure the scientific management and proper disposal of construction waste.
– Prevent pollution of rivers and natural water sources.
– Implement compensatory afforestation and forest conservation programmes.
– Maintain environmental flows in the river.
– Construct structures to control landslides and soil erosion.
– Prioritise local workers when providing employment opportunities.
– Conduct regular environmental monitoring and independent assessments.
– Establish an effective grievance redress mechanism.
These measures play an important role in maintaining a balance between the project and the environment while strengthening trust among local communities.
The Project’s Contribution to the Sustainable Development Goals (SDGs)
Clean energy and sustainable infrastructure play an important role in achieving the Sustainable Development Goals (SDGs) established by the United Nations. The Jagdulla semi-reservoir hydropower project is directly linked to several of these goals.
The project is expected to contribute particularly to the following goals:
– SDG 7: Affordable, reliable and sustainable energy for all.
– SDG 8: Decent work and economic growth.
– SDG 9: Sustainable infrastructure and industrialisation.
– SDG 11: Development of sustainable communities.
– SDG 13: Climate change mitigation.
– SDG 15: Protection of terrestrial ecosystems and biodiversity.
Thus, the project has the potential to become an important undertaking that contributes not only to electricity generation but also to achieving national and international sustainable development goals.
Local Partnerships and Social Responsibility
No project can achieve complete success without cooperation with local communities. Therefore, development programmes should be implemented in partnership with local governments, communities, civil society organisations, consumer groups and other stakeholders.
Programmes focused on education, healthcare, drinking water, sanitation, women’s empowerment, youth skills development, agricultural modernisation and entrepreneurship can help build long-term relationships between the project and local communities. When corporate social responsibility programmes are aligned with local needs and priorities, their impact becomes more meaningful and sustainable.
Commitment to a Sustainable Future
In today’s world, a successful project is one that gives equal importance to economic benefits, social responsibility and environmental protection. If the Jagdulla semi-reservoir hydropower project moves forward with clean energy generation, responsible use of natural resources, good governance, transparency and local participation as the foundations of its operations, it could set an exemplary model for future infrastructure projects.
Amid the challenges posed by climate change, investment in clean energy will make an important contribution to building Nepal’s green economy. By maintaining the trust of local communities, fulfilling environmental responsibilities and making effective use of technology, the project can achieve long-term success and sustainability.
Conclusion
The Jagdulla semi-reservoir hydropower project is a far-reaching and significant undertaking for the development of Karnali Province, Nepal’s energy security and sustainable economic prosperity. During construction, it will create opportunities for employment, infrastructure development, the promotion of local businesses and skills development. Once operational, it will make important contributions to clean energy generation, increased government revenue, industrial development and regional prosperity.
However, the project’s true success will not be determined solely by the volume of electricity it generates. Environmental protection, social inclusion, local community participation, good governance, transparency and accountable management are the foundations of long-term success.
If the project is implemented with scientific management of environmental and social impacts and with the expectations and interests of local people at its centre, it can usher in a new chapter of development in Karnali Province.
The Jagdulla semi-reservoir hydropower project is not merely an energy project; it is a powerful symbol of a shared commitment to the responsible use of natural resources, local prosperity, clean energy promotion and sustainable development. It is expected to meet the energy needs of the present generation while laying the foundation for a greener, more prosperous and self-reliant Nepal for future generations.
Nepalpurbadhar – Sanjay Sapkota
