Kathmandu: The 216 MW Upper Trishuli-1 Hydropower Project under construction in Rasuwa has become Nepal’s largest Foreign Direct Investment (FDI)-based hydropower project to date. The project, owned by Nepal Water and Energy Development Company Pvt. Ltd. (NWEDC), is being built on a run-of-river (BOOT) model.
The project, located in Rasuwa about 70 kilometers north of the capital Kathmandu, has a total estimated cost of USD 647.4 million, which includes USD 453.2 million in loans and USD 194.2 million in equity investment. The project will be completed in five years and will be handed over to the Government of Nepal after 30 years of operation.
High ‘Dry Energy’ Capacity Contributes to Energy Security
The main feature of the Upper Trishuli-1 project is its high dry-season energy generation capacity. The project is expected to produce 1,456.4 gigawatt-hours of electricity annually, of which 568 gigawatt-hours (39 percent) will be generated during the winter season. Generally, most hydropower projects in Nepal produce only about 20 percent dry-season energy, but this project is believed to reduce dependence on electricity imports from India during winter.
Close to Kathmandu, Minimal Transmission Loss
As the project is located close to Kathmandu, transmission losses will be minimal. The Nepal Electricity Authority (NEA) has already signed a Power Purchase Agreement (PPA) to buy the electricity generated. This is expected to enhance the stability and reliability of the national grid.
Multilateral International Investment and Technology Transfer
The project involves participation from international financial institutions such as IFC, ADB, AIIB, Korea Exim Bank, KDB, FMO, BII, Proparco, and the OPEC Fund. The EPC contract has been awarded to Doosan Enerbility, while Power China is involved in civil construction, and Andritz is responsible for hydro-mechanical and electro-mechanical works.
This is expected to enable the transfer of technology in accordance with international standards in Nepal, foster the development of skilled human resources, and establish a model example for large-scale foreign direct investment (FDI) projects.
Construction Progress and Timeline
Excavation of the project’s headrace tunnel (HRT) has been completed 100 percent. Concreting of the dam piers, tunnel lining, and installation of the draft tubes and spiral casings at the powerhouse have also been completed. Installation of turbines and generators is progressing rapidly. The project aims to achieve commercial operation (COD) by the end of 2026.
Environmental and Social Commitment
The Upper Trishuli-1 project is the first in South Asia to be developed after obtaining FPIC (Free, Prior and Informed Consent). Measures such as consent from Indigenous communities, biodiversity conservation plans, environmental flow (e-flow) management, and the construction of fish ladders have been adopted.
Under the Community Social Program (CSP), support has been provided for education, roads, bridges, empowerment of local institutions, and religious and cultural activities.
Benefit Sharing and National Contribution
It is estimated that the Government of Nepal will receive more than NPR 85 billion in royalties, taxes, and VAT from the project. Residents of the project-affected areas have been allocated 10 percent local shares, along with provisions for free electricity, employment, and training. Since the project will be handed over to the Government of Nepal after 30 years, it is regarded as a long-term national asset.
Recommendations to the Government
The project proponents and management have advised the government to ensure policy stability, timely completion of PDA/PPA agreements, a “one-stop solution” for FDI, stability in tax policies, and simplification of work permits and visa processes.
Jalasarokar