Budhi-Gandaki Hydroelectric Project in News

IAS Prelims 2023

Nepal has signed an agreement with a Chinese company Gezhouba Group Corporation (CGGC) to build the long-mooted 1,200-megawatt Budhi-Gandaki hydroelectric project. Estimates of the project cost at $2.5 billion.

Budhi Gandaki Hydropower Project is a storage type project located in Central/ Western Development region on the Budhi Gandaki River of Nepal.

This project was identified during the Gandaki Basin Study in late 70’s. In 1984, a prefeasibility study of the project was prepared. The ongoing Feasibility study of the Project has recommended 1200 MW capacity plant with FSL 540 masl.

The project lies in Gorkha and Dhading districts in Western/ Central Development region of Nepal. The project site is accessible through Benighat (At about a distance of 80 km from Kathmandu) on Prithvi Highway (Kathmandu – Pokhara).

From Benighat, a motorable composite bridge can be used to cross the Trishuli River and access the Dam and Powerhouse site both of which are at a distance of about 1.5 km from the road head.

As per the agreement, the storage project would be built under engineering, procurement, construction and finance (EPCF) model. Under this model, CGGC will help arrange funds required to develop the project.

The funds will be mobilised in the form of soft loan or commercial loan from Chinese financial institutions on terms and conditions acceptable to the Nepal government. CGGC will also undertake the overall responsibility of executing the project.

The Chinese developer will also conduct additional studies on and investigations into the project if required.

The MoU has given one year’s period to the Chinese developer to conduct assessment of the hydropower project and arrange necessary funds for its development.

CGGC is currently building 30 MW Chameliya Hydropower Project in the far-west and 60 MW Upper Trishuli 3A Hydropower Project in the central region.

India and China have vied for influence in the small country, with both pumping money into Nepal through large-scale infrastructure projects.