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The energy sector has suffered damage and economic losses estimated at Rs. 151.04 billion (approximately USD 997.13 million) following the Bhotekoshi floods, accounting for nearly 37 per cent of the total damage and losses caused by the disaster, according to the Rapid Damage and Needs Assessment (RDNA) report.

The report estimates physical damage to energy infrastructure at Rs. 134.69 billion (USD 889.21 million), while economic losses amount to a further Rs. 16.34 billion (USD 107.91 million).

The RDNA report estimated that the Bhotekoshi floods of August 26 caused total damage and losses worth more than Rs. 408.28 billion across various sectors. It has further projected that Rs. 723.31 billion would be required for reconstruction and rehabilitation.

The RDNA was undertaken under the leadership of the National Disaster Risk Reduction and Management Authority (NDRRMA), in collaboration with the National Planning Commission (NPC), federal ministries, provincial and local governments, security agencies and technical institutions.

Under the energy sector, the assessment covers hydropower and solar projects, transmission and distribution infrastructure, a substation, switchyard and other electricity network assets.

Hydropower projects alone account for Rs. 119.95 billion, or 89.1 per cent, of the total physical damage in the energy sector. The remaining damage concerns solar plants and the infrastructure needed to transmit, switch, and distribute electricity.

Solar plants suffered damage estimated at Rs. 4.73 billion, while transmission lines sustained Rs. 3.47 billion, substations Rs. 3.37 billion, distribution lines Rs. 1.62 billion and switchyards Rs. 1.55 billion in damage.

According to the report, 13 hydropower projects with a combined capacity of 759.025 MW were affected. Of these, seven projects with a combined capacity of 250.4 MW were already in operation, while six projects totalling 508.625 MW were under construction.

The hydropower projects, including 216 MW Upper Trishuli-1; 111 MW Rasuwagadhi; 120 MW Rasuwa Bhotekoshi; 78 MW Sanjen Khola; 6.42 MW Upper Mailung A; 5 MW Mailung Khola; 20 MW Langtang Khola and 22 MW Chilime hydropower project, have been affected by the floods.

The 24 MW Trishuli Hydropower Project; 14.1 MW Devighat Hydropower Project; 60 MW Upper Trishuli-3A; 37 MW Upper Trishuli-3B and 15.6 MW Middle Trishuli Ganga have also been affected by the flood.

This means about 67 per cent of the affected hydropower capacity was still under construction, highlighting that the disaster has not only disrupted existing electricity generation but may also delay the addition of future generation capacity.

The Trishuli 220 kV 3B Hub Substation has been completely damaged, while several transmission lines and towers operating at 132 kV, 66 kV and 220 kV have also sustained damage.

The solar plants with a combined capacity of 24.36 MW were also affected.

The aggregated valuation, however, does not represent the final repair or reconstruction costs of individual projects.

The assessment said that detailed engineering assessments will be required to determine the extent of damage to civil structures, electromechanical equipment and network components and establish the work required for safe restoration.

Generation loss

The assessment estimates annual energy losses of 2,520 GWh from hydropower and 210.48 GWh from solar projects, valued at Rs. 16.05 billion.

It includes Rs. 14.82 billion in hydropower projects and Rs. 1.23 billion in solar plants. A further Rs. 289 million has been recorded as energy royalty loss.

However, the report cautions against treating all affected hydropower capacity as electricity generation already lost. As more than two-thirds of the affected capacity was under construction, the impact of delays needs to be assessed against the original commissioning schedules of individual projects, said the report.

The actual restoration of electricity will also depend on the condition of the wider network. sediment deposition, unstable slopes, difficult access, availability of equipment and transmission connectivity could determine the order and pace of restoration.

The damage and loss inventory does not provide a consolidated count of customers without supply or project-specific outage and restart dates, said the report.

Rs. 390 billion needed for recovery

The energy sector's total recovery requirement has been estimated at around Rs. 390.62 billion, or USD 2.58 billion.

Of this, Rs. 1.05 billion has been identified for early recovery during the first six months while remaining Rs. 389.57 billion for long-term recovery beyond six months.

The proposed early-recovery allocation includes Rs. 500 million for transmission restoration, Rs. 400 million for substations, Rs. 100 million for distribution systems and Rs. 50 million for micro-hydropower projects.

The report said costs related to micro-hydropower projects should be reconciled with the separate household renewable-energy programme to avoid double counting.

Longer-term recovery will focus on restoring damaged generation and grid infrastructure and completing essential works at hydropower projects that were under construction when the disaster struck.

The prioritisation of recovery works will consider site safety, engineering conditions, achievable restoration timelines and the network connections required to bring usable generation capacity back into service.

Ownership and recovery financing

According to the report, the energy-sector recovery estimate does not distinguish between the portions expected to be financed by private project developers, the Nepal Electricity Authority, insurance arrangements or the government budget.

This distinction is particularly important because the assessed portfolio includes both operating projects and projects under construction.

Asset ownership, concession and contractual responsibilities, insurance coverage and existing financing arrangements should be verified before the recovery estimate is interpreted as a public financing requirement.

The recorded recovery need represents the estimated requirement for the sector and does not automatically indicate an amount payable by the government of Nepal, the report said.

Author: Laxman Kafle