KHOTANG: The long-stalled 670 MW Dudh Koshi Reservoir-based Hydropower Project is expected to gain momentum following its inclusion in Nepal’s fiscal year 2025/26 national budget.
Located at Rabhuwaghat on the border of Khotang and Okhaldhunga districts, the multi-purpose project had previously stalled due to lack of funding, especially for land compensation.
Nepal’s government announced the project’s inclusion in the budget as a priority, rekindling hopes for affected locals and stakeholders.
CPN-UML leader Bishal Bhattarai stated that despite several rounds of discussions on compensation, the process was held back due to financial constraints. “With the budget now in place, the project can move forward, and compensation distribution to landowners will begin,” he said.
The project, originally studied over 40 years ago, has received backing from the Asian Development Bank (ADB) and other international financial institutions. It is projected to require about 25,000 ropanis of land across Khotang, Okhaldhunga, and Solukhumbu—around 20,000 ropanis of which are privately owned.
The government has banned land transactions in the affected area, pending compensation decisions. The project has been listed as a National Pride Project, and inter-party discussions have recommended determining compensation based on market trends, government rates, and bank valuations.
Once completed, the reservoir—created by a 220-meter-high dam at Lamidanda—will divert water through tunnels to Halesi Tuwachung Municipality in Dhitung for electricity generation. The Nepal Electricity Authority (NEA) estimates annual energy output at 3.44 billion units.
Approximately 162 households will be fully displaced, and 988 partially affected. The project is also expected to boost tourism through boating, aquaculture, and access to nearby religious and natural sites like Halesi and Mt. Everest.
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