Nepal Restores $2.5 Billion Hydropower Plant Contract to Chinese Firm

The new government of Nepal has recently asked the China Gezhouba Group Corporation to build the nation’s biggest hydropower plant. Last year, the deal had been scrapped by the earlier government of Nepal. The reason mentioned was the lapses in the award process. NEA was supposed to have built the project.

The 1,200 M plant on Budhi Gandaki river will be about 50 km west of Kathmandu. Nepal wants the plant to be a part of the Belt and Road Initiative (BRI), which it signed up to last year. BRI is President Xi Jinping’s landmark scheme to connect China to the rest of Asia and beyond.

PM K.P. Sharma Oli had pledged that the project would be reverted back to the Chinese company of he was elected to power in last year’s election. He became PM in February this year. The date is yet to be set regarding the final signing of formal construction deal for the hydropower project. It will be done after negotiations from both sides.

Both China and India have been showing interest to provide aid and invest in infrastructure project for Nepal. Even though Nepal has a huge potential to generate hydroelectricity, it still has to import electricity from India to meet the 1,400 MW energy demand.