The Budhigandaki hydropower authority is the latest twist in a project that has already seen its development model change more than once. The 1,200-megawatt Budhigandaki Hydropower Project is again facing uncertainty over how it will be built, because shifting government policy threatens an implementation and financing framework that had already been approved, according to The Kathmandu Post.
What happened with the Budhigandaki hydropower authority plan
At its October 16 meeting, the Cabinet gave in-principle approval to draft the Budhigandaki Development Authority Bill. That reopened the debate over how the national pride project should be developed. In the current fiscal year’s budget, presented to Parliament on May 29, Finance Minister Swarnim Wagle announced that the Budhigandaki hydropower authority would be an empowered body to build the project. A year earlier, then finance minister Bishnu Paudel had proposed a public-private partnership model.
These repeated changes across successive governments and annual budgets have left the project without a settled implementation framework. Former energy secretary Anup Upadhyay has criticised the authority idea, arguing that the government should count its spending so far as equity and invite investment for the remaining amount.
Key details and numbers
The project was designated a national pride project in fiscal year 2012-13, with completion targeted for fiscal year 2026-27. Based on the Office of the Auditor General’s 60th annual report, its initial estimated cost was Rs260 billion. The project sits on the border between Dhading and Gorkha districts and has an estimated base cost of $2.77 billion, or around Rs374 billion. With Rs32 billion in interest during construction, the total projected cost reaches Rs406 billion.
- Financing split: 70 percent debt and 30 percent equity under the model approved by the interim Cabinet.
- Ownership: Budhigandaki Jalbidyut Company Limited is owned 80 percent by the Nepal government and 20 percent by the Nepal Electricity Authority.
- Government commitment: Rs97.47 billion in equity and Rs150 billion in concessional loans, totalling Rs248 billion. The Rs46 billion already spent, including compensation, has been converted into equity, and a further Rs228 billion must still be secured.
- Electricity Authority equity: Rs24.37 billion.
- Bonds and loans: Rs30 billion in energy bonds eligible for the statutory liquidity ratio, plus Rs104 billion in debt from a consortium including the Employees Provident Fund, Citizen Investment Trust, Social Security Fund, HIDCL, Nepal Telecom and commercial banks.
The interim government formed in September 2025 approved this financial structure. After Cabinet decisions on January 16 and February 24, the ministry told the promoter to proceed on March 23.
What officials and the company say
Officials at the Ministry of Energy, Water Resources and Irrigation say an approved financing model should not be abandoned. One ministry official said the country urgently needs reservoir-based hydropower to address winter energy shortages, and that setting up an authority would take considerable time, from drafting laws to creating the organisation.
Arun Rajauria, chief executive officer of the company, said it has begun preparing a draft of the bill and will send it to the Ministry of Law, Justice and Parliamentary Affairs. He said contracts and construction already under way will not be stopped, and that all existing responsibilities will transfer to the authority once the Budhigandaki hydropower authority is established.
Why it matters for homeowners in Nepal
The report links the project to winter energy shortages, which is the most direct concern for households and builders. A reliable electricity supply affects everything from site power and lifts to heating and cooling in finished homes. Delay in a large reservoir-based plant keeps this question open. The source does not give a revised completion date, so nobody should assume the 2026-27 target will be met.
For anyone planning to build or renovate, the practical lesson is to avoid depending on a single power source or an optimistic timeline. Large public projects that change course can also affect local land, compensation and infrastructure plans around the site, particularly in Dhading and Gorkha.
What to do next
- Follow official updates from the Ministry of Energy, Water Resources and Irrigation and the Nepal Electricity Authority on the bill and its timeline.
- Watch how the Budhigandaki hydropower authority bill moves through the Ministry of Law, Justice and Parliamentary Affairs.
- Budget for backup power, such as inverters or solar, when planning a new house.
- Read our related coverage on national pride projects in Nepal and irrigation projects to see how big infrastructure is progressing.
- Treat project dates as targets, not guarantees, when your own plans depend on them.
FAQ
What is the Budhigandaki hydropower authority?
It is the proposed body that would develop the project. The Cabinet has approved drafting the bill in principle, and the company has started preparing a draft.
How big is the project?
It is a 1,200-megawatt reservoir-based project on the Dhading and Gorkha border, with a projected total cost of Rs406 billion including interest during construction.
Will construction stop while the authority is created?
The company’s chief executive says contracts and construction already under way will not be stopped.
Who owns the project company?
The Nepal government holds 80 percent and the Nepal Electricity Authority holds 20 percent.
In short, the Budhigandaki hydropower authority proposal may or may not speed up delivery. The next steps depend on the draft bill and how it fits with the financing plan already approved.