Local residents have shut down a hydropower project in Khotang, citing the company’s failure to provide compensation.

Locals of Kepilasgadhi Rural Municipality shut down the Upper Rawa Khola Small Hydropower Project after landowners staged a protest demanding proper compensation and indemnification for the private land occupied by the project.

As a result, electricity generation from the 3-megawatt project has completely stopped.

An agreement was reached on November 22, 2025, between the company representatives and landowners to provide compensation by December 11, 2025. However, as the agreement was not implemented, locals diverted water from the turbine back into the river, halting power generation.

Despite years of operation, landowners have shut down the project, stating that Rawa Energy Development Pvt. Ltd. has failed to compensate them for the land used by the project.

The locals had also shut down the hydropower project in March last year. It was brought back into operation after an agreement was reached to provide compensation. However, locals have shut it down again, claiming the agreement was not implemented.

The landowners, led by Patan Bahadur Rai, have launched an agitation and stopped electricity production.

Rai warned that they would not allow power generation until compensation for the land is paid.

The 3-megawatt electricity generated from the Rawa River, located on the border of Sungdel and Kepilasgadhi Rural Municipality-6, Dipsung, was connected to the national grid in September 2020.

Locals said that although the company has paid compensation for the land where electricity poles were erected, it has not compensated land occupied by transmission lines and pipelines.

The landowners have demanded immediate compensation with fair valuation of all occupied land, repair of the road from Jalpa to the powerhouse, soling and proper sewage management.

They have also demanded the release of at least 10–15 per cent of water into the river during winter, legal permission to use government land, and resolution of the issue by prioritising the affected locals.

Meanwhile, Rajan Dahal, a member of the project’s board of directors, said that compensation has been paid to many landowners and claimed that some of the current demands are “unrealistic.”

By Rajkumar Bhattarai