The Department of Electricity Development (DoED) on Monday accused the Nepal Electricity Authority (NEA) of hyping up hydropower development and misleading the public following media reports that the capacity of the Tamor Hydropower Project would be boosted to 762 MW from 200 MW.

The reservoir-type Tamor Hydropower Project is to be built on the Tamor River in eastern Nepal. The NEA has obtained a licence to conduct a feasibility study for the construction of the project with an installed capacity of 200 MW. 

If the installed capacity of the Tamor project is increased to 762 MW, two smaller hydropower schemes being constructed downstream—37.5 MW Kabeli-A and 21.5 MW Lower Hewa—are expected to be inundated. This means the NEA will have to pay compensation to these two projects if it goes ahead with its decision to hike the capacity of the Tamor plant. 

The NEA said enlarging the Tamor project and providing compensation to the smaller schemes was a better option as it would mean a significant rise in energy production that would help the country to become self-sufficient in electricity and a net exporter.

The NEA has already applied for a survey licence to examine the feasibility of increasing the installed capacity. The state-owned utility has accused the DoED of ‘intentionally delaying’ issuing the permit and has asked that it be granted immediately. The department said it was considering the NEA’s request positively. However, it said that the state should also protect the interest of investors who are building the two projects, and any move to bar them from completing them may erode investor confidence and discourage private developers from entering the hydropower sector.

“The construction of the Lower Hewa project is about to be completed and Kabeli-A has just started construction work,” said Nabin Raj Singh, director general of the DoED during an interaction with NEA officials on Monday. 

“Against this backdrop, the department will issue a licence with the increased capacity if the NEA convinces the promoters of the Kabeli-A and Lower Hewa to drop their projects in exchange for compensation.” The NEA said that the department should issue the survey license immediately, and that it would hold talks with the promoters of the two hydropower projects only if it decides to build the project after completing the feasibility study. 

However, the NEA has agreed to negotiate with the promoters of Kabeli-A and Lower Hewa and present their consent to the department. “We have already initiated discussions with them,” said Mohan Ratna Shakya, officiating deputy managing director of the NEA. “We will will obtain their consent and present it to the department.” 

The NEA obtained a survey licence from the DoED in 2013 to conduct studies for the development of a 200 MW storage-type project on the Tamor River. Surveys later showed that the project could be upgraded to generate 762 MW of electricity.

In 1985, the Japan International Cooperation Agency (Jica) too had proposed to build a 696 MW hydroelectric project on the Tamor River by building a 153-metre high dam. However, the government did not show much interest in the proposal at that time.

Even though enlarging the Tamor Hydropower Project to 762 MW will directly impact under-construction projects downstream with the possibility of inundation, experts have stated that the larger national interest should be taken into account before reaching a final decision.