The 1,200 MW Budhigandaki Hydropower Project has faced long delays primarily due to unresolved financial arrangements, despite being approved nearly 13 years ago. Although about 95% of compensation to affected households has been distributed and essential studies—including the EIA and DPR—are complete, construction has not begun.
The project’s estimated cost has surged from Rs 255 billion in 2079 BS to around Rs 406 billion, largely because of repeated delays. The government has proposed a PPP model with 70% funding from loans and 30% equity, with the state holding 80% of equity and the Nepal Electricity Authority (NEA) 20%. Plans also suggest converting existing government investment into shares, issuing energy bonds, and mobilising funds from banks, financial institutions, public funds, and other agencies.
Once complete, the project is expected to produce 338 million units of electricity annually and generate Rs 31.48 billion in revenue. It will displace more than 8,100 households in Dhading and Gorkha, but it also holds strategic value due to its proximity to major load centres like Kathmandu, Pokhara and Chitwan.
A 263-metre-high arch dam will create a 63 sq. km reservoir, and the project is projected to operate for 42 years after completion. However, without finalising investment modalities, the country’s largest storage-type hydropower project remains uncertain.
