ADB commits to financing Dudhkoshi Reservoir Project in Nepal

KATHMANDU: The Asian Development Bank (ADB) has affirmed its dedication to invest in the Dudhkoshi Reservoir Hydroelectric Project, a substantial 635-megawatt hydroelectric scheme featuring a reservoir, as an integral part of Nepal’s power generation initiative.

During their visit to the project site, Kulman Ghising, the Executive Director of the Nepal Electricity Authority, along with Ramesh Subramaniam, Director General and Group Chief, ADB Office of the Director General, Sectors Group, inspected the reservoir area and power station location. They also engaged with local representatives in the Kotang district.

Subramaniam applauded the project’s remarkable progress and reiterated ADB’s unwavering commitment to propel it forward. He stressed the importance of effective financial management under ADB’s guidance and acknowledged the project’s warm reception by the local community. In terms of project development speed, Subramaniam noted that it ranks among the swiftest.

The estimated project cost, encompassing construction and interest expenses during the construction phase, stands at approximately 2.2 billion US dollars (equivalent to around 225 billion Nepali Rupees). Preparations for financial management involve securing 1.68 billion dollars through loans, with the remaining sum coming from equity.

Under ADB’s leadership, the project is anticipated to secure nearly 1 billion dollars in concessional loans from various international financial institutions. ADB has committed a concessional loan of 550 million dollars to support the project.

Arnaud Cauchois, ADB Country Director for Nepal, revealed their diligent efforts to expedite decision-making processes and the ongoing engagements with the Government of Nepal. He underlined the Dudhkoshi Hydroelectric Project’s significance as a mega project and the most extensive infrastructure development in the SAARC region, while urging patience and local community support.

Kul Man Ghising, Managing Director of the Nepal Electricity Authority, emphasized the project’s vital role in Nepal’s power system and expressed optimism that ADB would assume financial management responsibilities within a year (by December 2024).

Ghishing highlighted the finalization of technical, environmental, and social aspects of the project, urging local governments to proactively participate in development and construction activities if progress encounters delays. Ghising encouraged all stakeholders to contribute to and facilitate the project’s success.

During the program, Nishant Sharma, Chairman of Chisankhugadhi Rural Municipality in Okhaldhunga, called for a swift transition to the construction phase. He expressed concerns about the rising cost of living due to the project but reassured that the local community is prepared to support the project both mentally and physically.

Mayor Vimala Rai of Halesi Tuwachung Municipality in Khotang shared her insights into the project and expressed confidence in its immediate commencement, believing it could potentially lower the cost of living.

Phatikumar Shrestha, Chairman of Rawa Besi Rural Municipality in Khotang, believed that the project would enhance the livelihoods of the affected population. He expressed trust in the swift launch of the project and emphasized the preparedness of the local community to support its success.

The Dudhkoshi Reservoir Hydroelectric Project is expected to impact 3,139 households. Approximately 30,000 Ropanis of land will be acquired for the project, and the land acquisition process has already commenced.

The project aims to produce an annual 3.44 billion units of electricity, with 1.36 billion units generated in dry season and 2.08 billion units in wet season. The construction period for the project is estimated to span seven years.