NHPC to build a hydropower plant in Nepal

19 Aug 2022 , 10:09 AM

Years after a Chinese business withdrew, Nepal has inked a deal with an Indian company, NHPC, to build a hydropower project in the country’s western region, according to news reports.

To expand its economy and export electricity in order to reduce the more than $13 billion trade imbalance, Nepal has opened its rivers to foreign players. The country estimates that these rivers have a combined capacity to produce more than 42,000 megawatts of hydroelectric power.

A memorandum of understanding (MOU) was signed on Thursday by India’s NHPC Ltd, according to reports, allowing it to assess feasibility, environmental impact, land flooding, and construction costs for two projects: West Seti (750 megawatts), and SR 6. (450 megwatts).

In Nepal’s least developed far western region, both plants will be situated on the West Seti River.

The West Seti project was originally scheduled to be developed by Three Gorges International Corp, the largest hydropower developer in China, but Nepal cancelled the agreement in 2017 after wrangling over the terms, according to officials.

India has already begun work on a $1.04 billion hydropower project with a capacity of 900 MW on the Arun River in east Nepal.

Due to a lack of resources, technological know-how, and political agreement on how to exploit the resource, Nepal currently generates about 2,000 megawatts, or less than 5% of its overall hydroelectric potential.