Kathmandu- Golyan Group is planning to build two hydropower projects, and the U.S. International Development Finance Corporation (DFC) is interested in investing.
DFC is a U.S. government agency that helps fund projects worldwide.
It has already provided financial support for a detailed study of these projects and is now considering investing in their construction. The total cost of both projects is expected to be Rs 60 billion.
Two projects—Upper Mugu-Karnali (originally 306 MW) and Namlan Khola (originally 135 MW)—had received survey permits. However, due to environmental concerns, their capacities have been reduced. Now, Upper Mugu-Karnali will generate 200 MW, and Namlan Khola will produce 100 MW.
Prawin Aryal, CEO of Golyan Group’s Energy Division, said that the reduction was necessary to avoid core areas of a national park. He also mentioned that some conditions set by DFC influenced the German firm’s study.
This is the first time DFC is providing a grant for a project in Nepal. The institution has already provided USD 10 million for the study and is moving towards potential investment in construction. 'DFC is interested in investing, but no agreements have been signed yet. The process will move forward once the study is completed,' Aryal said.
Both projects are peaking run-of-the-river hydropower projects, meaning they can generate power during high-demand hours. The study agreement with the German firm was signed in October 2022 and was initially set to be completed in 21 months (by February 2025). However, it is now expected to be finished by August 2025.
The same firm will also prepare the tender documents for project development. If all goes as planned, the projects will be financially secured in 2026, construction will begin, and both plants will be operational by 2031.
The Namlan Khola Hydropower Project, located in Mugu district of Karnali Province, is a semi-reservoir project with a gross head of 290.5 meters and a net head of 279.67 meters.
The Upper Mugu-Karnali Hydropower Project, in Ward No. 3 of Mugum Karmarong Rural Municipality, Mugu, is also a semi-reservoir project capable of generating electricity for up to five hours during peak demand.
Additionally, in the upper Mugu Karnali Basin, the Electricity Generation Company Limited is studying a much larger 1,902 MW reservoir-type hydropower project.
