- After a decade and a half of struggle, the Middle Bhote Koshi Hydroelectric Project has started commercial production of 102 megawatts of electricity.

- Despite delays in construction due to political interference, natural disasters, and local obstacles, the project is now generating electricity at full capacity.

- The project, whose costs have risen to nearly 22.5 billion NPR, is expected to generate an annual revenue of 280 million NPR.

The Middle Bhote Koshi Hydroelectric Project, primarily promoted by Chilime Hydropower Company, a subsidiary of the Nepal Electricity Authority, has begun commercial production. The project, which signed a Power Purchase Agreement (PPA) in 2011 and has faced numerous ups and downs since, has now started generating 102 megawatts of electricity daily.

Despite delays in construction caused by political interference, repeated local attacks under administrative cover, internal mismanagement, and events such as earthquakes, floods, landslides, and COVID-19, the project is now generating electricity at full capacity as planned. Water from the Bhote Koshi River, flowing from Tibet through the Tatopani border, is being diverted through a dam built in Chaku, Bhote Koshi Rural Municipality-5, into a 7.5 km tunnel leading to the powerhouse constructed in Jambu, Barhabise Municipality, where 102 megawatts of electricity is now being produced.

The Nepal Electricity Authority has begun purchasing electricity from the project on a trial basis. According to Ram Gopal Siwakoti, CEO of the Middle Bhote Koshi Hydropower Company, test production had been successfully ongoing since 12th September. The Authority announced on Thursday that it has started buying the electricity generated.

According to Siwakoti, the Authority has informed that payment for the electricity produced will start from 6th October. Once operating at full capacity, the Middle Bhote Koshi project is expected to earn around NPR 12 million daily from electricity sales. The Authority will purchase electricity at NPR 4.80 per unit during the monsoon and NPR 8.40 per unit in the dry season, which is considered to last from Mid December to Mid April.

The project is expected to earn nearly NPR 120 million from electricity sales for the first time in Mid September- Mid October. The generated electricity is connected to the national grid via the Dalkebar Substation through the New Khimti transmission line. Recently, production was further delayed because locals prevented the construction of the transmission line for 14 months while demanding various concessions. Initially estimated at NPR 1.233 billion, the project’s cost increased to nearly NPR 2.25 billion due to delays in completing it on schedule.

CEO Siwakoti stated that the current cost can only be estimated. According to him, the project’s cost increased due to interest on loans taken from the Employees’ Provident Fund and the rise in the US dollar exchange rate. Because of the increased costs, the estimated production cost per megawatt has reached NPR 22 million. The project has to pay nearly NPR 1.5 billion in interest alone to the Provident Fund. Out of the NPR 900 million loan taken from the Fund, delays in construction have caused the interest to amount to NPR 600 million.

The project has an agreement to repay the principal and interest to the Provident Fund in 40 installments, though the timeline for payments can be extended, the project has indicated. The project aims to produce electricity worth NPR 5.422 billion annually and is expected to generate an annual revenue of NPR 280 million. According to Siwakoti, the project can produce a minimum of 35 megawatts during the dry season and up to 110 megawatts during the monsoon.

The project was initiated in 2011 by the then CEO of Bhote Koshi Company, Kulman Ghising. It faced significant challenges even in its early stages. During construction, Radha Gyawali, while serving as Energy Minister, removed Ghising from his position as CEO of the project. Following his removal, some employees even halted the project work for a period. Due to these and other obstacles, a project that was planned to start in 2013 and be completed by 2017 took nearly a decade and a half to finish and begin electricity production.

During the construction of the project, workers of local political parties even attacked the structures, and Kulman Ghising faced mistreatment. The project never received genuine local support, and its internal management frequently faced problems due to lack of proper leadership. The civil works, including the tunnels, were carried out by China’s Guangxi Hydroelectric Construction Bureau (GHCB).

Kantipur