MANILA, PHILIPPINES –
The Asian Development Bank (ADB) is lending $150 million towards a $500 million
project that will build a hydropower plant with a 140-megawatt capacity.
“Nepal has an energy
crisis, and this is affecting badly economic prospects,” said Yongping Zhai,
Director, Energy Division in ADB’s South Asia Department. “This energy project
is a means to stop this crisis.”
Electricity demand is
growing at 10% a year, but lack of investment means supplies are not keeping
up. Blackouts of up to 18 hours a day in the dry season are common, even in the
capital Kathmandu. This forces businesses and households to use expensive and
polluting diesel generators.
Nepal’s mountain ranges
and many swiftly flowing rivers endow it with huge hydropower resources.
However, the country’s total installed power generation capacity is just 700
megawatts – largely from hydropower. This represents only 1.5% of Nepal’s
hydropower potential.
The 140-megawatt
hydropower plant, to be located around 150 kilometers west of Kathmandu on the
Seti River in Tanahu district, will generate electricity year round. To ensure steady supply
even during the dry winter months of November through April, the plant will be
fed from a 7.26 square kilometer reservoir, making it Nepal’s first major
hydropower plant with water storage capacity and a sediment flushing system.
Around 85% of Nepal’s existing plants use the run of the river to generate
power, which makes for lower output during the dry season. None have the means
to cope with Nepal’s sediment-heavy rivers.
In addition to building
the plant and a transmission system, the project will also provide at least
17,636 homes in the area of the hydropower plant with direct connections to the
national power grid. Only around one-third of households in Nepal are connected
to the electricity distribution grid, with connection rates much lower in rural
areas.
The entire project will
cost around $500 million and will be co-funded by ADB and the Japan
International Cooperation Agency lending, the European Investment Bank, and the
Abu Dhabi Fund for Development.
The hydropower plant’s
construction will follow best international practice. ADB will ensure that the
appropriate social and environmental rules, procedures and guidelines are
adhered to. The project company, Tanahu Hydropower Limited, will invest in
health and education programs as well as income and livelihood skills training
for the local communities. ADB and its partners carried out climate change
impact modeling work on the project, and will do more assessments prior to its
construction.
Media advice from ADB
