Every successive government has made it a point to include the long-delayed Dudhkoshi Storage Hydroelectric Project in its annual budget, but real progress on the ground has remained elusive due to financial hurdles.
In the budget for the fiscal year 2023/24, then Finance Minister Prakash Sharan Mahat announced that the investment modality for the 1,200-MW Budhigandaki and 635-MW Dudhkoshi storage hydropower projects would be finalized, and construction work would move forward to meet dry season electricity demand and support exports.
His predecessor, Finance Minister Barshaman Pun, had made similar commitments in the current fiscal year’s budget, pledging to initiate construction on the 1,200-MW Budhigandaki, 670-MW Dudhkoshi, 417-MW Nalgad, and 280-MW Naumure multipurpose hydropower projects.
Finance Minister Bishnu Paudel continued the pattern in his recent budget announcement for fiscal year 2025/26. He declared that construction on the 670-MW Dudhkoshi project would commence following completion of land acquisition.
Despite repeated inclusion in national financial plans, the Dudhkoshi project—slated to be developed at Rabhuwaghat on the border of Khotang and Okhaldhunga districts—has struggled to move beyond the planning stage, primarily due to funding gaps amid unresolved compensation issues.
The Asian Development Bank (ADB) and other international financiers are expected to back the project, but delays in determining land compensation have heightened concerns among affected communities and fueled uncertainty around its future.
According to the Nepal Electricity Authority (NEA), the project will require the acquisition of approximately 25,000 ropanis (about 1,270 hectares) of land across Khotang, Okhaldhunga, and Solukhumbu districts—20,000 ropanis of which is privately owned.
To prevent speculative land transactions, the government has already frozen land sales in the affected areas. In Khotang, the land has been locked as of July 7, 2021, in Okhaldhunga on March 7, 2022.
According to the state-owned RSS news agency, a multi-party committee has agreed that land valuation will be based on guidelines under the Land Acquisition Act, 2034 BS, taking into account prevailing market rates, bank appraisals, recent transaction values, and government benchmarks.
Still, the determination of compensation remains pending.
CPN-UML leader from Khotang, Bishal Bhattarai, acknowledged that while multiple rounds of discussion have taken place, compensation couldn’t be set earlier due to lack of budget. “Now that the project is included in the plan for the upcoming fiscal, compensation determination and distribution will move forward,” he said.
Rawabesi Rural Municipality Chair Phatik Kumar Shrestha noted that while landowner feedback has been incorporated and submitted to the valuation committee, final pricing remains unresolved. “Separate assessments are needed for owners of small plots—less than three or five ropanis,” he added. “There are also families who’ve lived on others’ land for decades and now face displacement, complicating valuation and resettlement.”
One such community is the Majhi, a densely settled group in Rabhuwaghat. Local authorities have appealed to relevant agencies to ensure proper relocation and rehabilitation support for these vulnerable residents.
The NEA estimates that the project will fully displace over 150 households and partially affect nearly 1,000 more. Additionally, the reservoir is expected to submerge farmland belonging to over 1,000 families.
Rabhuwaghat, located between Lamidanda in Khotang’s Rawabesi Rural Municipality–3 and Bhadure in Okhaldhunga’s Chisankhugadhi Rural Municipality–6, is the site for the construction of the 220-metre-high dam. Water will be diverted via tunnels to Dhitung in Halesi Tuwachung Municipality–9 for power generation.
Once completed, the Dudhkoshi project is projected to generate 3.44 billion kilowatt-hours (kWh) of electricity annually.
Beyond electricity, the reservoir is expected to enable recreational boating, fish farming, and tourism development. Authorities anticipate that tourists visiting the tri-religious pilgrimage site of Halesi and the Everest region could be drawn to new water-based attractions in the Dudhkoshi basin.
(With inputs from RSS)
