The Budhi Ganga Hydropower Project, originally scheduled for completion by 2025, is now expected to take an additional four years. The project was initially planned to be completed within 42 months of the contract signing, but the contracting process is yet to be finalized.
The procurement process for civil and hydro-mechanical works is currently in its final stage. Project Chief Surendra Ghimire said a letter of intent has been issued after evaluating the bids, and the draft contract has been sent to the donor agency for approval. This is the fourth round of bidding, as the previous bids were canceled during the pre-qualification stage. The 20 MW semi-reservoir project will be constructed in Achham.
The project was designed in 1997 by Canadian International Water and Energy Consultants, with support from Metcon Consultants. A loan agreement was signed between the Government of Nepal, the Saudi Development Fund, and the Kuwaiti Fund for Arab Economic Development, valid through 2025. Saudi Arabia agreed to provide a loan at two percent interest, and the Kuwaiti Fund at 0.5 percent.
The donor agencies are involved in every procurement stage. Recently, the draft agreement was sent for approval on 28 April 2025, after responding to two rounds of queries from the donors.
Ghimire said that the project has been focused on studies and land acquisition. Much of the documentation was lost during the Maoist attack on Mangalsen during the conflict, leading to delays in land surveying and verification. “Main construction hasn’t begun, and no contract has been awarded yet. A significant amount of time has been consumed in the preparatory phase. We had to remeasure lands as government agencies had lost original records,” said Ghimire. The Ministry of Finance must also approve funding sources, as the government is a project partner.
Due to time overruns, project costs have risen. Originally, the total estimated cost for civil and hydro-mechanical works (Lot-1), electro-mechanical works (Lot-2), and transmission line (Lot-3) was Rs 9bn. The revised estimate has increased the total cost to Rs 14bn. However, after transferring responsibility for the transmission line to the National Transmission Grid Company, the cost of civil and electro-mechanical works alone is now estimated at Rs 9bn. The Ministry of Finance must again provide source approval for these revised costs.
The loan agreement, initially valid until 2025, has been extended to 2027 due to delays. Ghimire said the project is prepared to request a further extension if necessary.
The project will now be implemented under a multi-year EPC (Engineering, Procurement, and Construction) contract, divided into three packages. Revisions to the detailed engineering design and environmental impact assessment have already been completed.
In the current fiscal year, only 15.39 percent of the allocated Rs 96.55m budget has been spent. According to the Ministry of Finance, the capital expenditure rate so far is 30.73 percent, with only 0.05 percent specifically utilized for the project.
To date, the project has completed several preparatory tasks. These include the environmental study of the transmission line and dam site, construction of office and residential buildings, establishment of the campsite and the Chapartola Substation in Doti, acquisition of 327 ropanis of land, and the construction of an access road and bridge.
