Nepal government reopens debate on Budhigandaki hydropower by proposing new authority

After years of postponement, Nepal’s Cabinet has given in-principle approval to draft legislation establishing a Budhigandaki Development Authority, effectively abandoning the public-private partnership model that Finance Minister Bishnu Paudel had proposed in the prior fiscal year. Finance Minister Swarnim Wagle presented the authority plan in one outlet budget, prompting former energy secretary Anup Upadhyay to denounce the move as ill-advised.

The 1,200-megawatt Budhigandaki Hydropower Project, designated a national-pride venture with a target finish by FY 2026-27, was originally estimated at Rs 260 billion but now faces a total cost of about Rs 406 billion. Officials warn that creating a new authority could delay construction, as the financing model—70 % debt, 30 % equity—has already been approved and contracts are underway. Budhigandaki Jalbidyut Company Limited, 80 % owned by the Nepal government, says the bill will not halt existing work and will eventually transfer responsibilities to the authority. Funding gaps of roughly Rs 228 billion are expected to be met through energy bonds, loans, and contributions from entities such as the Nepal Electricity Authority and various public funds.