Daunted by the uncertainty, massive costs and high payout associated with the much-hyped Budhi Gandaki Hydroelectric Project, energy officials have decided to construct the Dudh Koshi Storage Hydroelectric Project, another storage type project with less social impact, first.

A day after Energy Minister Barsha Man Pun met Chinese Ambassador to Nepal Hou Yanqi and sought help from the northern neighbor to arrange funds for the Dudh Koshi scheme, Nepal Electricity Authority officials revealed that they were finalising a detailed design and had updated the feasibility study for the project.

The preparatory studies are nearing completion nearly six years after the Asian Development Bank provided a grant assistance of $21 million to carry out studies for high priority hydropower schemes including the Dudh Koshi.

The approval of the final design will pave the way for the state-owned power utility to arrange finance and build the power plant located in Okhaldhunga and Khotang districts in eastern Nepal.

As per the draft final design obtained by the Post, the total cost of the project has been estimated at $1.523 billion excluding taxes and other financial costs.

In 1998, Canadian International Water and Energy Consultants carried out the first feasibility study and suggested generating 300 MW from the plant. In 2013, a review of the feasibility study carried out by the electricity authority upgraded the capacity to 635 MW.

The state-owned power utility, which plans to build the scheme through a subsidiary company, appointed ELC Electro Consult of Italy and NEWJWC Inc of Japan as engineering consultants to the projects in 2016. The consultants recently submitted a draft of the final detailed design.

The updated feasibility study for the Dudh Koshi Storage Hydroelectric Project recommends building a main underground powerhouse near the Sunkoshi River with four units generating 150 MW each and a small 35 MW hydro unit near the toe of the dam.

The dam will be located on the Dudh Koshi River in a gorge nearly 1 kilometre downstream of the confluence of the Dudh Koshi River and the Thotne Khola. The main dam will have a height of 220 metres and hold back 1,581 cubic megametres of water.

The reservoir type project will produce 3,443 GWh annually, higher than the expected annual output of 3,383 GWh of the proposed Budhi Gandaki scheme. The snowmelt-fed Dudh Koshi River originates in the foothills of Mt Everest, allowing the plant to perform efficiently even in the dry season.

The report shows that the social impact of the Dudh Koshi scheme will be less as only 162 households will be severely impacted while 1,150 households will be partially affected.

“Its sound economic performance, as a possible storage hydropower project candidate, is dramatically strengthened by the negligible social impact, limited to a few tens of households,” the report said. “No potentially insurmountable impacts were identified which would necessitate a fundamental alteration of the proposed project design parameters.”

According to Nepal Electricity Authority Managing Director Kulman Ghising, the Dudh Koshi scheme will also be vital for cross-border power trade with neighbouring countries.

“The project will allow us to easily export energy under cross-border agreements, and its development and social costs are reasonable compared to other proposed storage projects,” said Ghising. “The project is also a viable candidate for financing by the government and international institutions including the Asian Development Bank.”

As per the draft detailed design, it will take six years to build the dam and other project structures.

Japanese and Italian consultants have estimated the cost of the civil works at both power houses at $304.42 million. The estimated spending on the electromechanical works is $169.73 million. Environmental and social impact mitigation would cost the project $104.39 million.

The scheme, which is expected to enter the construction phase in 2020, will also build a $58.31 million high capacity transmission line and two substations which will relay power to the interconnection point at Dhalkebar substation. A 22.3 km double circuit 400 kV line will run from the Sun Koshi River to the Dudh Koshi switchyard and a 90.9 km long line will relay power from Dudh Koshi to Dhalkebar.

The project will also build three access roads running through the Mid-Hill Highway and Dudh Koshi Valley and restore connectivity of three routes in the Thotne Khola and Rawa Khola area.

As per the feasibility study, non-energy benefits of irrigation, increased agricultural yields, improved flood control and tourism development will also be realised by the country.