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The government is set to move four major hydropower projects, including the much-awaited 828-megawatt Uttarganga Reservoir Hydropower Project, into the contracting process within the upcoming fiscal year.

Presenting the budget for fiscal year 2026/27 in the Federal Parliament on Friday, Finance Minister Dr. Swarnim Wagle announced that Rs 85.54 billion has been allocated for electricity generation, transmission, and distribution systems, with priority given to expanding the energy sector.

According to the budget, the contracting process will begin after financial arrangements are completed for the 828-megawatt Uttarganga Reservoir Hydropower Project, the 1,061-megawatt Upper Arun Hydropower Project, the 210-megawatt Chainpur Seti Hydropower Project, and the 77-megawatt Ghunsakhola Hydropower Project.

Similarly, the government stated that studies for the 417-megawatt Nalgad Hydropower Project, the 490-megawatt Arun-4 Hydropower Project, and the 281-megawatt Naumure Hydropower Project will be advanced. The budget also mentions that the contracting process for the 439-megawatt Betan Karnali Hydropower Project, which is being developed with investment from Employees Provident Fund depositors, will begin next year.

Uttarganga project in focus for two decades

The Uttarganga Reservoir Hydropower Project, proposed in the Dhorpatan area of Baglung, has remained under discussion since 2004. The project is being developed by Uttarganga Hydropower Company Limited, a subsidiary of the Nepal Electricity Authority.

The project’s Environmental Impact Assessment (EIA) report was approved in 2080 BS. Considered one of Nepal’s most cost-effective reservoir projects in terms of per-megawatt cost, the project is now being prepared for the construction phase following budget allocation and financial management efforts.

Federal MP from Baglung Constituency No. 2, Shome Sharma, said clear provisions have been included in the budget to move the project into the contracting phase. According to him, the long-awaited project is now expected to enter a new stage of implementation.

Target to begin power generation within 10 years

According to the feasibility study, a dam approximately 200 meters high will be constructed on the Uttarganga River in Dhorpatan to store water. The stored water will then be diverted to Nisikhola through a tunnel for year-round electricity generation.

The project includes the construction of an 8,510-meter headrace tunnel and a 1,875-meter penstock pipe. In addition, two underground powerhouses will be built. Four units with a capacity of 105 megawatts each will be installed in the first powerhouse, while four units with a capacity of 101 megawatts each will be installed in the second powerhouse.

The project aims to begin electricity generation within 10 years from the start of construction and is expected to make a significant contribution to the country’s energy security.

Jalasarokar