Upper Arun to Proceed with Domestic Investment if World Bank Withdraws

The Managing director of the authority and the promoter of the project, Upper Arun Hydro-Electric Limited, chairman of the board of directors, Kulman Ghising, the company’s managing director Phadindraraj Joshi, and a team of others visited the construction site on Saturday and Sunday. The project is attractive to the country’s energy sector and the overall economy in discussions with the officials of the Tribal Advisory Council He said that Nepal must build projects that can be transformed. When the participants in the

discussion said that they had received information that the future of the project was in doubt regarding the World Bank’s investment, Executive Director Ghising made it clear that if the World Bank does not invest, the Upper Arun will be advanced with the investment of banks and financial institutions within the country and Nepalis at home and abroad.

The World Bank, led by the Asian Development Bank (ADB), Japan International Cooperation Agency (JICA) and others, has made it a high priority to raise investment of about 2 billion US dollars. Administrative and diplomatic discussions are being held for the bank’s investment,’ he said.

Discussions between the World Bank and domestic banks and financial institutions are proceeding in parallel to raise investment, he said. In this situation, we will advance the project by collecting funds from banks and financial institutions in the country and Nepalis in the country and abroad through share issue, the project should be built when billions of rupees have been spent on the project so far,’ he said . He also said that the construction of the entrance road, which is considered a challenging

, has already started. “There are still challenges in construction, and the project should be solved at any cost. I can confidently say that the project will move forward even if we collect indigenous investment,” he said.

The authority has proposed a model of blended financing, consisting of the Nepal government, the state government, local levels of project-affected districts, project-affected district residents, common people from all over the country, concessional loans from international multilateral development partners, and loan investments from domestic banks and financial institutions. It is going forward as a project.

Upper Arun, which has an estimated cost of 1 billion 750 million dollars (about 2 trillion 14 billion), including interest and price increase during the construction period, will be raised from 70 percent debt and 30 percent equity. World Bank-led co-financing from international financial institutions and A plan has been made to manage the finances by collecting funds from local banks and financial institutions.

For this, under the leadership of Hydroelectricity Investment and Development Company (HIDCL), a memorandum of understanding (MOU) has been signed to raise investment through co-financing from 53 billion Swadeshi banks and financial institutions.

51 percent of the equity will be collected from the founder shares of Upper Arun Hydro Electric Company, the promoter of the project, and 49 percent from public shares. In Upper Arun included in the people’s hydropower program, the provincial government, the local level of the district Sankhuwasabha where the project is located, and the Nepal Electricity Authority will have a founding share. Project-affected residents, including common people across the country, will have 49 percent common shares. A consultant has been appointed for the construction supervision of the

project and the design review and bid documents are being prepared. From the beginning of 2026 Pre-construction works are being done with the goal of starting construction. The construction of the project is targeted to be completed within the year 2031 . The acquisition of 232.14 hectares of private land required for the

project has been completed. About 99 percent of the land to be acquired has been distributed. The rehabilitation work of those displaced by the project is ongoing. Around 22 households will be physically displaced from the project. The study has shown that the environmental and social effects of the construction of the project will be relatively low. The

project has been designed to run at full capacity for 6 hours a day during the 6 months of winter when the demand for electricity is high. The project will produce 4.53 billion units of energy annually. About 30 percent of this energy will be produced in winter. The produced electricity will be transmitted to the national system through the proposed substation at Haitar in Sankhuwasabha through a 6 km 400 KV transmission line . The Authority has advanced the 40 MW Ikhuwa hydropower project to be a part of the Upper Arun. Ikhuwa is also a project included in Janata Jaldyut program .