The Asian Development Bank (ADB) has announced it is lending $150M towards a $500M hydropower project in Nepal.
The 140MW hydropower plant, to be located on the Seti River in Tanahu district, will be fed from a 7.26km2 reservoir, making it Nepal’s first major hydropower plant with water storage capacity and a sediment flushing system. Around 85% of Nepal’s existing plants use the run of the river to generate power, which makes for lower output during the dry season. None have the means to cope with Nepal’s sediment-heavy rivers.
In addition to building the plant and a transmission system, the project will also provide at least 17,636 homes in the area of the hydropower plant with direct connections to the national power grid. Only around one-third of households in Nepal are connected to the electricity distribution grid, with connection rates much lower in rural areas.
The project will be co-funded by ADB and the Japan International Cooperation Agency lending, the European Investment Bank, and the Abu Dhabi Fund for Development.
The hydropower plant’s construction will follow best international practice, said ADB in a statement, adding that it will ensure that the appropriate social and environmental rules, procedures and guidelines are adhered to. The project company, Tanahu Hydropower Limited, will invest in health and education programs as well as income and livelihood skills training for the local communities. ADB and its partners carried out climate change impact modeling work on the project, and will do more assessments prior to its construction.