Fiscal Nepal
First Business News Portal in English from Nepal
KATHMANDU: In a decisive push to unlock one of Nepal’s most strategically important hydropower investments, Minister for Energy, Water Resources and Irrigation — as well as Physical Infrastructure, Transport and Urban Development — Kulman Ghising has urged the Asian Development Bank (ADB) to immediately finalize the long-pending financial management package for the 670 MW Dudhkoshi Reservoir Hydropower Project.
During a meeting with an ADB delegation led by Sona Shrestha, Deputy Director General of ADB’s South Asia Department, and Arnaud Cauchal, Country Director for Nepal, Minister Ghising emphasized that the financing process for Dudhkoshi has been under discussion for an excessively long time. He stressed that the project must now move toward closure without further delay.
USD 2.2 Billion Project Awaits Financial Closure
The Dudhkoshi reservoir project — considered one of Nepal’s most critical hydropower undertakings — carries an estimated cost of USD 2.20 billion (approximately Rs 225 billion) including interest during construction. According to the government, the financing plan envisions USD 1.68 billion in loans and the remaining amount through equity.
Under ADB’s leadership, a consortium of international development partners is expected to provide USD 1 billion in concessional loans, of which ADB alone has committed USD 550 million. Despite this commitment, the finalization of the full financing structure has remained pending.
Preparatory works are currently underway at the project site, but full-scale construction can only begin after financial closure.
Ghising Pushes Broader Infrastructure Agenda
In the meeting, Minister Ghising also urged ADB to scale up investments in:
Water supply systems
Road connectivity
Irrigation improvements
Electricity transmission and distribution modernization
He further requested ADB to support feasibility studies for infrastructure solutions aimed at easing Kathmandu’s chronic traffic congestion, including flyovers and tunnels at key intersections.
Government Assures Solutions to Environmental & Social Issues
Minister Ghising acknowledged that several ADB-supported projects have faced delays due to environmental approval challenges, forest land clearance, land acquisition disputes, and compensation for informal (ailani) land users. He assured the delegation that the government is working to resolve these bottlenecks and strengthen institutional capacity within implementing agencies.
“We will address the issues of forest land use, tree clearance, land acquisition, compensation for ailani land, and environmental and social safeguards,” Ghising said. “Institutional capacity enhancement will remain a priority.”
ADB Seeks Regulatory and Execution Improvements
The ADB delegation, for its part, requested the government to improve expenditure capacity, streamline land acquisition procedures, expedite compensation mechanisms, and enhance the technical and managerial capabilities of project-executing agencies.
ADB officials emphasized that resolving these issues will be crucial not just for Dudhkoshi but for all development projects financed under ADB assistance.
Your email address will not be published. Required fields are marked *
Comment *
Name *
Email *
Website
Save my name, email, and website in this browser for the next time I comment.
