KATHMANDU — Nepal has pressed the Asian Development Bank (ADB) to swiftly conclude the long-delayed financing package for the 670 MW Dudhkoshi Reservoir Hydropower Project, one of the country’s most important energy investments.
During a meeting with a visiting ADB team led by Sona Shrestha, Deputy Director General for South Asia, and Arnaud Cauchal, Country Director for Nepal, Energy Minister Kulman Ghising said the discussions around financial management have dragged on for far too long. He stressed that it is time for the project to reach financial closure so construction can begin without further setbacks.
A USD 2.2 Billion Project Waiting for Green Light
The Dudhkoshi reservoir project, regarded as a national priority, is estimated to cost USD 2.2 billion (around Rs 225 billion) including interest during construction. The government plans to secure USD 1.68 billion in loans and the rest in equity.
Under ADB’s leadership, international development partners are expected to contribute USD 1 billion in concessional loans, with ADB alone committing USD 550 million. Despite these commitments, the final financial structure remains pending. Preparatory work has started at the project site, but full-scale construction depends on financial closure.
Broader Infrastructure Needs Highlighted
Minister Ghising also used the meeting to urge ADB to expand its support in other key sectors, including drinking water systems, road connectivity, irrigation, and the modernization of electricity transmission and distribution networks.
He further requested ADB’s backing for feasibility studies on major infrastructure solutions — such as flyovers and tunnels — to relieve chronic traffic congestion across Kathmandu Valley.
Addressing Delays and Safeguard Challenges
Ghising acknowledged that several ADB-funded projects face delays due to environmental clearances, forest land approvals, land acquisition disputes, and compensation challenges for informal (ailani) landholders. He assured the delegation that the government is working to resolve these issues and strengthen the institutional capacity of agencies responsible for project execution.
“We are committed to resolving forest land use approvals, tree clearance, land acquisition, compensation for ailani land, and all environmental and social safeguard issues,” he said. “Strengthening institutional capacity will remain a priority.”
ADB Calls for Stronger Execution and Regulation
ADB officials, meanwhile, emphasized the need for faster spending, improved land acquisition procedures, timely compensation, and stronger technical and managerial capabilities within implementing agencies. They noted that addressing these issues is essential not only for Dudhkoshi but for all ADB-supported development projects in Nepal.
The meeting concluded with both sides expressing commitment to accelerate progress and ensure smooth implementation of major national infrastructure initiatives.