Nepal asks Chinese firm to build its biggest $2.5 billion hydropower plant

The new government of Nepal has asked China Gezhouba Group Corporation to build the biggest hydropower project of country on the Budhi Gandaki river. The estimated cost of the project is $2.5 billion and its power generation capacity will be 1200 MW. The proposed site for the project is about 50 Km west of Kathmandu.

Earlier, the project was awarded to the same Chinese firm but in November 2017 it was scrapped by the previous government of Nepal after citing the irregular agreement with the firm and lapses in the contract of building the project.

Nepal’s new government is looking for massive investment in infrastructure to boost the economy of landlocked country and trying to make balance in relations with its neighbors – India and China. Nepal has huge potential for hydropower generation.

The Information Minister of Nepal, Gokul Baskota told AFP, “The decision to scrap the agreement with the Chinese company by the previous government was taken without any ground.

He said, “We decided to correct that, because Nepal doesn’t have the capacity to build such a big project and funding is also challenging”.

Earlier Nepal was dependent on India for its electricity demand. 1400 MW electricity is required to fulfill the country’s electricity demand. This 1200 MW project will make Nepal able to export electricity to its neighbors.

Many Chinese firms are constructing number of hydropower projects in Nepal. Nepal government awarded two projects, each of 900 MW capacity, to Indian firms GMR and Satluj Jal Vidyut Nigam Limited. But the work progress of the projects awarded to Chinese and Indian firms is slow.

Work on Aruna III Hydropower project started, 26 years after it was proposed, when Prime Minister of India, Mr.  Narendra Modi visited Nepal this year in the month of April.

China Gezhouba Group Corporation is building three another smaller hydropower projects in Nepal and has also completed one such project.