Rasuwagadhi Hydropower Project Setback: Completion Pushed Back, Cost Rises to Rs 18.47 Billion

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KATHMANDU, Nov 17: The Rasuwagadhi hydropower project under construction through public-private partnership has been pushed back for another six months.

According to Rasuwagadhi Hydropower Company Limited, the target of generating electricity from the 111 megawatt project has been set within March/April.

Earlier, the electricity generation target was fixed by September/October. The overall physical progress of the project has reached 97 percent, the company said. According to the project, the cost of the project has increased to Rs 18.47 billion with the increase of time. This cost is exclusive of interest during the construction period. Adding the interest during the construction period will further increase the cost of the project.

Earlier, the estimated cost of the project had increased to Rs 17.56 billion excluding interest during the construction period. When the construction started, the cost was estimated at Rs 13.68 (excluding interest during the construction period).

The company said that due to earthquakes, blockades and floods, the cost of the project increased due to the extension of time. The cost of the project has increased by Rs 4.78 billion.

The project will generate an annual income of Rs 3.25 billion by selling electricity. As many as 613,875,000 units of electricity produced by the project will be sold to the Nepal Electricity Authority (NEA).

The Rasuwagadhi project was scheduled to be completed on February 19, 2020. Since then, the deadline of the project has been extended time and again. The government had set a target to complete the project in the last fiscal year. Earlier, the developer had stated the target of generating electricity by Paush (mid-December to mid-January). The government also aims to complete the Rasuwagadhi project within the current fiscal year.

Earlier, after reaching the target of generating electricity from June/July 2022, it was extended by six months to December/January 2022. After the completion of the project was not possible even by December/January, it was extended by three months to March/April.

It is mentioned in the financial statement released by the company that due to the devastating earthquake, blockade, Covid-19 pandemic, huge flood in Bhotekoshi River and some technical problems, the project’s deadline has been extended.

The cost of the project excluding the interest during the construction period is Rs 13.68 billion, and the loan investment was made from the Employees’ Provident Fund (EPF).

Interest is being capitalized every three months. The EPF has been charging 10.5 percent interest. Similarly, the company has already issued Initial Public Offering (IPO) to the general public.

The construction of the project started in 2014. Even after a decade, the Rasuwagadhi project has not been completed.

The Chinese contractor that built the hydro mechanical structure including the first tunnel is China International Water and Electric Corporation (CWE).

In the second lot, the electromechanical equipment work was done by India’s White Hydro and the transmission line work was done by the Nepali company Mudbhary & Joshi Construction.

After the contract ended, Royal Construction Company was entrusted with the remaining work and the company claims to have successfully completed it.

The company’s paid-up capital is Rs 6.85 billion, with 51 percent ownership held by founders and 49 percent by public investment.

In the project, 18 percent of ownership has been allocated to the NEA, 32.79 percent to Chilime Hydropower Company Limited, 19.5 percent to the general public, 15 percent to the local residents of Rasuwa and 10 percent to the employees of the lending institution.

The run-of-river (ROR) project will have three turbines of 38 MW capacity. The project is located in Gosainkunda Rural Municipality near the Nepal-China border.

Source: Republica