Nepal’s cabinet decision paves the way for ambitious upgrade of South Asia’s largest hydropower project

KATHMANDU: The government has decided to enhance Nepal’s largest hydropower project, the Karnali Chisapani Hydropower Project, with a capacity of 10,800 megawatts. The decision was made during a cabinet meeting on Thursday, where the Ministry of Energy has been tasked with conducting an in-depth study to determine the modalities for the project’s expansion.

The project, under discussion for over six decades, is poised to advance with the aim of regional development, focusing on utilizing the Karnali River near the border of Sudurpashchim and Karnali provinces.

The Nepal Electricity Authority will conduct a comprehensive study to create the project, benefiting countries including Nepal, India, Bangladesh, Bhutan, Sri Lanka, and Pakistan on a regional level. The government will base its decisions on the findings of this study.

Initiated in 1989, the project had faced setbacks when Nepal withdrew from the joint investment with India. However, based on the results of an old study, the government is now preparing to move forward with the project, which is estimated to cost around Rs 2000 billion (around $16 billion), significantly higher than the previous estimate of NPR 500 billion. The construction of the project is expected to irrigate an area of 200,000 hectares in Nepal and 3.4 million hectares land in India.

Due to cost and investment issues, the government had not been able to proceed with the project, as explained by Energy Ministry spokesperson Madhu Bhetwal. He pointed out that although neighboring countries, including India, were willing to support the project, the challenges of increasing costs and investments had hindered progress.

Bhetwal emphasizes the potential benefits of the project for both Nepal and India, indicating that the irrigation facilities generated from the project would be more beneficial for India, while the flood risk would be reduced.

Initially, Japanese companies were involved in the project, followed by consultations from Norway, Australia, and Germany. In 1977, then-Indian Prime Minister Morarji Desai, during his visit to Nepal, had studied the project. Subsequently, the United Nations Development Programme (UNDP) conducted a study on the feasibility of turning the project into a multipurpose one, beyond just generating electricity.

The project study began in 1966, and in 1968, groups like Snowy Mountains Engineering Corporation (SMEC), Narcon, and North American consultants conducted a feasibility study. Despite completing a feasibility study, the response to the proposal to understand the project’s capacity has not yet been received.

Following this, a Canadian company, Himalaya Power Consultants, along with three Canadian and one American consultant, suggested in their study that the project’s capacity could be increased to 16,200 megawatts. The government faces challenges in moving forward without a detailed study report for the project.

Earlier, Indian industrialist Gautam Adani’s Adani Group, has shown interest in investing in Nepal’s hydropower and electricity infrastructure. Adani Group has proposed to invest in large hydropower projects, cross boarder transmission lines and internal transmission lines in Nepal.