Karnali’s Largest Hydropower Project Enters Construction Phase after Year-Long Delay

Karnali Province — The long-delayed construction of the 106 MW Jagadulla Hydropower Project, considered vital for the economic development of Karnali Province, is finally set to proceed after the project developer and the contractor signed a bilateral agreement.

The agreement, valued at Rs 12.18 billion, was signed between Jagadulla Hydropower Company Limited and JCE/ANK JV. CEO Sanjay Sapkota of Jagadulla Hydropower said the deal has paved the way for construction to begin after a one-year delay caused by disputes and complications in the bidding process.

The developer had first issued a tender notice for the construction of civil and hydro-mechanical structures on June 2, 2024. Although seven companies initially submitted proposals, none were selected. In the second call, two companies qualified, with JCE/ANK JV offering the lowest bid.

Financing for the project was secured in June 2024 under a consortium led by Nabil Bank, which will invest Rs 4.4 billion. Other financiers include Hydroelectricity Investment and Development Company Limited (HIDCL) and the Employees’ Provident Fund (Rs 4 billion each), Laxmi Sunrise Bank (Rs 2 billion), and Everest Bank (Rs 1.5 billion). The project is estimated to cost Rs 23 billion, with Rs 16 billion financed through loans and Rs 7 billion to be raised from equity.

The project, in which the Karnali Province government also has a stake, aims to begin power generation within five years of construction. Established under the slogan “Nepal’s Water, People’s Investment,” the company is majority-owned by the Government of Nepal.

The project site lies 238 km from Nepalgunj, with the dam located in Hurikot, Jagadulla Rural Municipality. The project call for a 23-meter-high and 38-meter-long barrage, with a catchment area of 633.83 sq. km. The underground powerhouse, in Mudkechula Rural Municipality-4, will measure 77.8 meters in length, 14 meters in width, and 33.45 meters in height, housing three vertical-axis Pelton turbines of 35.5 MW each.

After power generation, water will be discharged back into the Jagadulla River through a 330-meter-long tailrace channel. Electricity will be evacuated via a 132 kV transmission line to the proposed Bafikot substation.

The developer will oversee the survey, construction, production, operation, and management of the project. Its authorized capital is Rs 8 billion, with issued capital of Rs 7.1 billion. Founding shareholders include the Electricity Generation Company (26%), HIDCL (10%), Nepal Electricity Authority (9%), Karnali Province government (5%), and local governments of Jagadulla and Mudkechula (1%).

This will be the first major hydropower project in Karnali Province to enter the construction phase. The project received its generation survey license on July 2, 2017 and its transmission line survey license on January 1, 2020. The power purchase agreement was signed on May 10, 2023.

Once operational, the plant is expected to generate 623.32 GWh of energy annually. All studies and designs were carried out by NEA Engineering Company, a subsidiary of the Nepal Electricity Authority, ensuring the project will be built with domestic expertise and investment. - RSS