Kathmandu, Jan 24: The investment framework for the Budhigandaki hydropower project, listed as a National Pride project, has been officially determined. The total cost of the project is expected to reach NPR 320.58 billion, excluding the government’s expenditures on compensation and related matters.

The government has allocated NPR 73.2 billion for environmental and social protection, with NPR 43 billion already distributed as compensation. The latest investment framework proposes designating the amount spent on environmental and social protection as a ‘Viability Gap Fund’ to reduce the overall project cost.

Prime Minister Pushpa Kamal Dahal ‘Prachanda’ has emphasized expediting the project, considering it a top priority. A recent discussion at the Ministry of Energy, Water Resources, and Irrigation involved the participation of representatives from government-owned financial institutions.

According to the investment framework, the project will require an investment of NPR 122.58 billion over the next ten years, along with NPR 90.78 billion from internal capital. Additionally, NPR 32.02 billion will be sought through loans at commercial interest rates.

To fund the project, an infrastructure tax of NPR 5.555 billion will be needed in the fiscal year 2081/82, followed by NPR 8.44 billion in the fiscal year 2082/83. Various entities have been proposed for investment in the project, including the Nepal Electricity Authority with NPR 35 billion, Employee Provident Fund, Citizen Investment Fund, and Nepal Telecom with NPR 10 billion each. Other contributors include insurance companies (NPR 5 billion), Social Security Fund (NPR 1 billion), and project-affected residents of Dhading and Gorkha (NPR 30 billion).

Energy Minister Shakti Bahadur Basnet urged government-owned financial institutions to invest, emphasizing the project’s national significance. He stated that collective efforts were essential to secure the necessary investment for the national pride project.

Energy Secretary Gopal Sigdel highlighted the importance of sending a positive message by raising investment from internal sources for such a critical project. The Budhigandaki hydropower project, located on the Budhigandaki River bordering Dhading and Gorkha, will involve the construction of a 263-meter high dam and is expected to generate three billion 383 million units of electricity.