The Nepalese government has decided to award a multi-billion dollar hydroelectricity project to a company from its giant neighbor, China, Nepalese officials said Wednesday.
The country’s cabinet on Tuesday approved the Ministry of Energy’s proposal to allow Chinese Gezhouba Group Corporation (CGGC) to build the 1200-megawatt reservoir project, the country’s largest plant aimed at supplying electricity to the capital Kathmandu.
Janardan Sharma, the energy minister, told The Kathmandu Post on Wednesday that the meeting also approved a draft of an agreement to be signed with the Chinese company.
“The CGGC will get a year to make an assessment of the project and arrange funds,” Sharma told the newspaper.
But the move of the coalition government headed by the Maoist party has come under fire from the opposition, who had pushed for funding from local sources.
The 200 billion Nepali rupee ($1.92 billion) Budhi Gandaki Hydroelectricity Project, located on one of the country’s major Himalayan rivers, has already begun handing out compensation to thousands of people affected by the proposed 263 meter high dam, but the government had not decided on the modality for its construction.
The project is one of a dozen dubbed ‘national pride’ projects, which the government has prioritized over others. The project will impact an estimated 3,560 houses along the river and will affect schools, small markets and farmlands. The government has allocated $23 million in compensation to those affected by the project.
The giant Chinese engineering company is no stranger to Nepal’s booming hydropower sector. The CGGC currently has two projects—60 MW and 30 MW—under construction in Nepal.
The Chinese company will carry out engineering, procurement, construction and finance for the Budhi Gandaki Hydroelectricity project on the Budhi Gandaki River in central Nepal.
Nepal, which has an abundance of water resources, has sought to tackle growing energy needs by harnessing hydropower.
Despite its vast potential, the Himalayan nation only produces about 800 MW of hydropower, forcing it to import power from India.
By Deepak Adhikari in Nepal