Nepal signs mega hydro project deal with Chinese firm

As per the agreement, the storage project would be built under engineering, procurement, construction and finance (EPCF) model. Under this model, CGGC will help arrange funds required to develop the project

By: PTI | Kathmandu | Published: June 5, 2017 12:05 pm
Nepal Hydro Project, Nepal, Chinese firm, Nepal Energy Minister Janardan Sharma, CGGC President Lv Zexiang, China President Lv Zexiang, World News, Latest World News, Indian Express, Indian Express News Nepal Energy Minister Janardan Sharma (left) with CGGC President Lv Zexiang (Source:

Nepal has signed a major deal with a Chinese company to develop a 1,200 MW hydroelectric project, the biggest hydro project in the landlocked country that could resolve its perennial power crisis. Nepal’s Ministry of Energy Sunday signed an MoU with China Gezhouba Group Corporation (CGGC) for the development of teh much-touted 1,200 MW Budhigandaki Hydroelectric Project.

The agreement was signed at the prime minister’s residence, in the presence of outgoing prime minister of Nepal Pushpa Kamal Dahal ‘Prachanda’ and Chinese Ambassador to Nepal Yu Hong, The Kathmandu Post reported. As per the agreement, the storage project would be built under engineering, procurement, construction and finance (EPCF) model. Under this model, CGGC will help arrange funds required to develop the project.

The funds will be mobilised in the form of soft loan or commercial loan from Chinese financial institutions on terms and conditions acceptable to the Nepal government. CGGC will also undertake the overall responsibility of executing the project.

The Chinese developer, according to the MoU, will also conduct additional studies and investigations on the project if required. The MoU has given one year’s period to the Chinese developer to conduct assessment of the hydropower project and arrange necessary funds for its development.

This understanding, according to Energy Ministry officials, will not bind the government legally or financially to hand over the project to the Chinese company for construction, as the final agreement is yet to be signed. The government has allocated a budget of Rs 5.33 billion for the project’s development in the current fiscal year.

The EPCF model of project development, under which the contracting firm makes all the arrangements including mobilisation of financial resources to build the project, is considered to be one of the most effective and efficient models for development of huge infrastructure projects.

CGGC is currently building 30MW Chameliya Hydropower Project in the far west and 60MW Upper Trishuli 3A Hydropower Project in the central region.

The Budhigandaki Project has been touted as a key project to resolve the perennial power crisis in the country. The government has been raising infrastructure tax of Rs 5 from sales of every litre of petrol, diesel and aviation fuel to collect funds to build the project.

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  1. L
    l s
    Jun 5, 2017 at 1:19 pm
    Namak haram country. Again and again stabbing India in the back after receiving and shamelessly taking aid in hundreds of crores. India should teach this country a lesson that it will never forget. Stop all aid and stop visiting this country in future.
    1. Angbuhang Bashant
      Jun 6, 2017 at 8:17 am
      LS (sounds like a troll name anyway), Indians like you with such mentality will only breed hatred and divide among Indians and Nepalese. As a sovereign nation Nepal has every right to bring in foreign investments either be from India or China if it best serves the interest of their people and nation as a w . You also seem to lack knowledge of how Indian national and multinational companies are reaping profits from Nepalese. Nepal is also a sole market for their products ranging from daily consuming goods or luxury goods. We do not need aid but want to our nation to grow as a sustainable and prosperous country. Do not bring your sour relationship of your country with China and drag us into it. Kudos to you and India.
      1. Tribhuwan Kumar Bhatt
        Jun 6, 2017 at 9:01 pm
        If India can do business with China who have perennial territorial disputes, then why the chinese investment in Nepal is regarded as detrimental to Indian interests. We Nepalese want friendly relation with both the neighbors. Why is Nepal always been dragged in so called Sino-Indian rivalry?? Nepal has religious and cultural bonding with India, and it should always been maintained as such. Nepal will never allow its land to be used for anti-india activity which is also repeatedly iterated by Nepalese leaders, and at the same time we also want to be economically independent. Long live India, long live Nepal, long live friendship. Jai Nepal! Jai Hind!! Jai Hindu Unity!!