Nepal’s hydropower boom needs strategic assessment and public oversight

(The Third Pole, 16 Jan 2019) Without a comprehensive plan for its hydropower sector, Nepal suffers the fate of a resource-rich country that cannot use its abundance well, argues Eugene Simonov.

Prologue: A tale of two dams

In 2017, I visited 1,200 MW Budhi Gandaki hydropower project, 70 kilometers from Kathmandu, and found many similarities with the Egiin Gol hydropower project in Mongolia, long monitored by our RwB Coalition. 

Both projects were designed in the 1970s Soviet-school mega-hydropower planning style, both have not progressed in 40 years. In both cases, the international consultancy Tractebel Engineering proposed to increase dam height and reservoir volume beyond limits considered economically feasible by local experts. In both cases the same main contractor China Gezhouba, was assigned to build the dam without a proper international tender, but the projects were soon stopped due to major changes in decision-making. 

Egiin Gol Hydro remains part of the Mongolian government’s plans, but a soft loan from China EximBank approved for the project was later redistributed to seven more sustainable and much needed projects, from a wastewater treatment plant in Ulaan Baatar to higher education programmes.  

The Budhi Gandaki contract, cancelled by outgoing government in late 2017, was then reinstalled by new Maoist-led government. However Nepalese experts I spoke to did not believe this dam would be completed in the foreseeable future. Many factors are similar with our experience in Mongolia: prohibitively high costs for a small country, coupled with an uneconomical design; little capability to ensure proper compensation to affected communities; and huge potential impacts on downstream World Heritage sites that will require costly mitigation.

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The Third Pole, 16 Jan 2019: Nepal’s hydropower boom needs strategic assessment and public oversight