The Chaudhary Group has moved forward to acquire a 51 percent stake in the company tasked with building the 1,902-megawatt Mugu Karnali Reservoir Hydropower Project.
In the first phase, the state-owned Vidhyut Utpadan Company Limited (VUCL) invited proposals for Nepali citizens and companies or organizations promoted by Nepali citizens to acquire 51 percent ownership in the project under a public-private partnership model. Only CG Energo Pvt. Ltd., a subsidiary of the Chaudhary Group, submitted a proposal.
A source from the Chaudhary Group, which recently renamed its subsidiary from CG Investment and Securities to CG Energo, told New Business Age, "No other company except CG Energo applied." A representative from VUCL confirmed this, saying, "There is a provision in the working procedure regarding investment partnership for project construction that even if only one company submits a proposal, it will be accepted."
This indicates a strong likelihood that CG Energo will be selected to develop the project, according to the project officials. If the proposal meets the required criteria, CG Energo will secure the contract by acquiring a majority stake in the project company.
The Indian company Adani Group had also expressed interest in developing this project. Meanwhile, five companies have applied to partner in building the 454 MW Kimathanka Arun Hydropower Project. Previously, Nepal had also invited Chinese companies to build the Kimathanka Arun Project.
Nabin Poudel, VUCL’s information officer, stated that the evaluation process considers factors such as the financial condition of the applicants, certainty of investment, net worth, audit reports, and annual turnover. "We primarily offer the opportunity to companies that are financially robust and capable of investment," he said.
He also mentioned that the Phukot Karnali Hydropower Project has faced opposition from locals due to its partnership with a foreign company. To address such concerns, the company is now prioritizing investment from domestic resources.
A senior official of VUCL revealed that apart from the Chaudhary Group, the Adani Group had also shown interest in the Mugu Karnali project. Both groups had engaged in discussions with VUCL’s representatives.
The first phase of proposals invited Nepali citizens and Nepali-promoted organizations to acquire a 51 percent stake in the project, which is being developed under a public-private partnership model. If no suitable proposal is selected after two rounds of the first phase, the procedure allows for a second phase, where joint ventures involving foreign investors can apply.
The company issued a public notice on December 8, 2024, inviting proposals for the Mugu Karnali and Kimathanka Arun projects, with an initial deadline of 15 days. A subsequent notice extended the deadline by another 15 days until December 21. After the final deadline expired on Tuesday, the proposals were opened for evaluation.
The Mugu Karnali project, currently undergoing a feasibility study, is estimated to cost Rs. 460 billion. Once completed, it is expected to generate 6,291.8 gigawatt-hours of electricity annually. Considered a game-changer for Nepal’s energy sector, the project will be built in the uppermost belt of the Karnali River, spanning five districts: Kalikot, Bajura, Mugu, Humla, and Jumla. The dam is planned to rise approximately 283 meters above the river surface.
For the Kimathanka Arun Hydropower Project, five companies—Bela Nepal Industries Pvt. Ltd., Vision Energy and Power Ltd., NJ Hydro Energy Pvt. Ltd., Noble Group of Hydro Energy Pvt. Ltd., and Anak Hydropower Company Pvt. Ltd.—have submitted applications for private sector participation.
