Nepal approves drafting law on agency for Budhigandaki HPP — Kathmandu Post
In Nepal, the Cabinet of Ministers on October 16 approved in principle the drafting of a bill to establish the Budhigandaki Development Agency for the 1,200 MW hydropower project. The decision once again calls into question the implementation model for the project, whose financial structure had previously been approved, Kathmandu Post reports.
Change in implementation model
In the budget for the current fiscal year, Finance Minister Swarnim Wagle announced that the hydropower plant would be developed through an authorized agency. In the previous year's budget, then Finance Minister Bishnu Paudel proposed a public-private partnership model. The project received national priority status in the 2012–2013 fiscal year and was planned to be completed by 2026–2027.
Former Energy Secretary Anup Upadhyay criticized the idea of creating a new body. He believes that government spending on the project should be counted as equity, while the remaining funds should be raised from investors. Officials at the Ministry of Energy, Water Resources and Irrigation also warned that drafting the law and establishing the agency could slow down the implementation of the hydropower project.
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Financing and cost
The project's financial structure was approved by the interim government formed in September 2025. Under the plan, 70% of the cost is to be financed through debt and 30% through equity. The base cost of the hydropower plant on the border of Dhading and Gorkha districts is estimated at $2.77 billion, or about 374 billion rupees. Including 32 billion rupees in interest during construction, the total could reach 406 billion rupees.
Budhigandaki Jalbidyut Company Limited, which is advancing the project, has already begun preparing the draft law. Its head, Arun Rajauria, said that existing contracts and work would not be halted, and that after the agency is established, the company's responsibilities and activities would be transferred to the new structure. The government is to provide 97.47 billion rupees in equity and 150 billion rupees in concessional loans, while the Nepal Electricity Authority is to provide another 24.37 billion rupees in equity.
