Powered by ProofFactor - Social Proof Notifications

Kali Gandaki Hydroelectric Project: Powering Nepal’s Growth

Feb 24, 2023 | 0 comments

blog banner

Feb 24, 2023 | Essays | 0 comments

About The Project

Kali Gandaki is a hydro power project located in Nepal that is suitably named after the river it is located in. the dam, which is the largest in Nepal to this day is located in the Gandaki River. The power plant being the largest in the country has a capacity of 144 W. the project which had been proposed in the early 1990’s, began construction in 1996. Various engineers both local; but mostly imported worked on the dam for the next years, completing the project in 2002. The World Bank declared it a success, despite the various challenges that the encountered in distribution and production of power. Before the implementation of the project, it is important to note that Nepal was in the biggest crisis where electricity was concerned.

People also read

Already a poor country by many standards, the economic situation of the country is the early 1990’s was something less desired. Media often reported blackouts which left business with many losses and homes in darkness not just for hours, sometimes for days. The losses incurred by business forced closure of many doors. On the other hand, entrepreneurs quickly lost interest in the ventures they had undertaken. The result was that the Gross national Product of Nepal, went to its lowest. The government attempted many alternatives which proved to be less than sustainable. Importation of electricity which is common for third world countries could not be achieved since the country lacked resources for the same. The country was facing what looked like a bleak situation, one which held the international community in great concern before the proposal for Kali Gandaki came into the picture.

Objectives of the project

The project was born out of a need to bridge the current demand for electricity and the supply of the same. In Nepal, electricity was becoming a precious product which cost the citizens too much and yet the supply was unreliable. the government was desperate to find a reliable source of electricity. the government had also noted that in future the demand for electricity would increase, making an already bad situation even worse, (Dhital 2015). based on this, project intiators came up with the following objetcives.

Broad objective:

Improve the supply of electriticity. all objectives of the project were based on this broad objective, where the government hoped and worked towards increasing the supply of electriticy. constanct electric disruptions were all due to a poor supply. The current supply of the electricity could barely cover the county. (Nepal et al. 2006) noted that for some rural areas of Nepal, electricity was something that was non-existent. Homes and business survived on generators and other alternative electricity sources. Unfortunately this often proved quite expensive and therefore unsustainable a situation that translated to closure of the businesses and alternative power sources for the homes.

Specific objectives

In the proposal presented in 1996 by the Nepal government to private institutions and foreign governments while seeking support to make the project a success, the following were the objectives cited:

  1. Assist in meeting the demand for electricity at least cost in an environmentally sustainable and socially acceptable manner.

The concern for the environment sustainability has been the forefront concern in ever electricity project in many countries. There are some countries who have had to set aside billion dollar projects because they are no longer environmentally sound. Other projects have displaced thousands, taking up native land of individuals and while benefiting the country, they often leave a trail of despair. This situations have led to increased criticism and sometimes closure of such projects. Hence, while the Nepal government was determined to make changes in the supply of electricity, they were also determined in ensuring that such changes came at little if any cost to the community and the environment, in this case the Gandaki River.

2. strengthen the institutional and financial (management capacity) position of the NEA

The World Bank and other international institutions have drawn concern with major projects undertaken in the third world countries. Such projects are often prone to mismanagement and corruptions, a situation which often renders the projects worthless. The Nepal government, desired to begin at the early stages by strengthening the management of the project.

3. improve cost recovery to promote efficiency in power consumption

This is in terms of resources that have been put into the project. In essence, the project should be able to run itself without requiring additional resources.

Major challenges experienced by the public sector

As with any public project, Kali Gandaki project faced many challenges many of which critics have felt delayed the onset of the project.

Lack of resources: Nepal is a poor country in itself, a third world country that has often been plagued by natural calamities. The country is currently experiencing an inflation rate of 9.9%. In early 90’s the government spending was out of control. The country lacked enough resources to even start the project. The country’s citizens were in abject poverty, majority of them below the World Bank’s $1 line of poverty. The project therefore seemed like more of a utopian, non-existent project that is not only difficult but will never be achieved (Chandler 1991). In fact major government critics often cited that the money used in formulating the proposals for the project would have been wisely spent on other projects that would have proved more successful and at least lessened the burden of poverty on the citizens.

To counter this challenge, the Nepal government began by inviting private institutions to become part of the project. The project itself would benefit big business, and improve the country’s GNP which should mean increased income for private instutions. Proposals were sent to major investors and foreign governments. Ministers and government officials began lobbying for funds from instutions and government. In addition, the government itself cut greatly on its own spending in order to focus the funds on the project. Institutions such as the Asian Development bank, immediately bought into the idea and formed a partnership with the Nepal government which allowed for proper funding as we’ll as management of the project.

Lack of appropriate skill: (Nepal 2014) states that there has often been a common misconception when it comes to third world county projects. He indicates that majority of the projects are often challenged by the lack of proper talent to make the projects a success. However, the common misconception is that, locals cannot acquire the necessary skills to make the project a success. The Nepal government began on the same misconception, and instead opted to rely on imported skill. Engineers were hired from abroad countries and companies given the tenders of the dam were initially foreign companies. Whereas this allowed the project to take off in good time, the government soon recognized an error in terms of sustainability. The local citizens were unaware of the intricacies of the project and therefore maintained and servicing of the project would have to rely on skills from abroad engineers. This would mean that production could incidentally stall while the country awaits experts for the maintenance and servicing. With this is mind, the government made investments, encouraging citizens with some skills to take up positions within the project. Through sponsorship, the local citizens developed the necessary skills to take over the project. By the third year, Kali gandaki was progressing fairly well with the right talent for ensuring its own success.

Poor management: in the initial stages, the project was thronged with unnecessary costs and delays which arose from lack of proper and right management skills of the country. The project drew in many corrupt officials and funds were often mismanaged. this drew much criticism from the country’s citizens who were incidentally enduring high taxes and high interest rates, a result of the ever groweing recurrent costs of the project. realizing that a complete unpheavl was necessary in order to bring about success; the government partnered with the world bank and ADB, to provide management of the project. The two institutions took a few months to streamline the costs and time management of the project. This included reducing the number of workers involved and finding new suppliers for necessary materials at lower costs. The result was a 10.9% decline in the average costs of the project.

Appropriateness of the mix of public and private sectors

Kali Gandaki began as a fully public project, initiated by the government and supported by the government. However, the costs of the project and the required resources were too much to be endured by the government. Citizens were already gains the project before it even began, since they foresaw increased taxes and high interest rates for many years as they support the project. The government opted to partner with private institutions which offered skills on many fronts.

Financial support: the project would never have taken off without the financial support of the private institutions and especially, the Asian Development Bank which opened the door for other instutions to come in. The government not only gained through financial support but was also able to acquire necessary loans at low interests from the bank to support the project. In some cases as (Benamghar And Benamghar 2011) points out the government also partnered with the private institutions as guarantors for loans from other governments, though this was in rare cases where funds had completely dried up.

Management: the World Bank and the ADB bank were instrumental in streamlining management of the project. Critics who had initially been against the project as it provided many loopholes for mismanagement became more relaxed as the management was taken over by independent instutions. These institutions not only provided the guidelines for management but also ensured that the rules of financial management, planning of resources and use of the same were strictly adhered to. With many public projects failing, stalling and becoming too costly for the citizens, kali gandaki enjoyed proper management skills, talent and monitoring ensuring that chances of success were higher.

Stakeholders Associated With This Project

Nepal Government: the main stakeholder for the project was the Nepal government. It is to be noted that the initial proposal for the project was brought by the government. The government had sought various techniques to reduce the cost of electricity within its borders and after continous failure had finally opted for the Kali gandaki project. The government campaigned for the project and sought the initial resources required to start off the project. (Asian Development Bank 2000) indicates that for some international economists, the move by the government to initiate such a costly project was viewed as a political maneuver in Nepal. However, for many the government was desperate to find a lasting solution to the decreasing national income and increasing poverty levels. The cost of maintaining public resources such as schools and institutions was too high, mainly because such institutions required electricity which was in low supply and in some other cases completely non-existent.

Private institutions and businesses: a common group severely affected by the lack of electricity in Nepal were the private instutions. Major businesses often avoided investing in the country for fear of losses that they would incur with continual blackouts. Furthermore, alternative energy sources often proved too costly, making entrepreneurship a costly venture. In some cases major instutions such as banks had to be closed due to blackouts that hampered with service provision. All in all, these intuitions were willing to invest and support the government in ensuring that Kali gandaki was a success,

Foreign investors: (Nepal 2008) cites that majority of the time, this group that is, the foreign investors are clearly forgotten when considering the stakeholders of the Nepal project. Many foreign investors were working towards the success of this project. The success would mean that Nepal would indeed become a vital and ripe ground for investment. Foreign investors who are able to predict and support the country in ensuring the success would enjoy lucrative profits and other benefits from their investment. Failure indeed would not be an option. The foreign investors were determined to cut a piece of the expected cake even as the project showed high chances of success.

Furthermore, success of the project would greatly increase the national income which would in turn improve the rate of inflation. This would make Nepal, an ideal ground for further growth and investment. However, like with all new regions rip for investment, it is only those who were able to invest early that would reap rewards.

Community and citizens: These group would be the final recipients of the project rewards. The citizens of Nepal had endured decades of poor electricity services which were often too costly for the average home. Many homes and local business were forced to do without electricity because they could not access neither afford it. As the population of the country increased, the demand for electricity also increased, the result was that the gap widened between demand and expected supply. The future for the citizens seemed bleak until the implementation of the project. The project was designed to ensure increased power production and distribution of the same to all the citizens. These included the rural citizens some of whom had yet to receive the advantages of electric power. These power would also be accused at much lower costs, making it affordable in all Nepal homes.

Innovations In Kali Gandaki

Engineering design: the kali gandaki project has been effectively studied by various engineering students and enthusiasts. The original design placed the power houses and the dam at nearer centers, however much studies produced an alternative setting which has been the benchmark for various other hydro-power centered. The power house is located downstream the river, a unique design that has provided two advantages:

  1. increased power supply and distribution; engineers are able to maneuver the production settings in order top increased the amount of power that is required within a specific duration. this setting also provided an extra advantage where many homes were able to acess power simply because distribution was made easier. (Kleinert 1998) states that for many projects the problem is not the power production itslf but more of the distribution. while the dam may produce ideal power, as kali gandaki, majority of the hydro-power projects are designed so that distribution of the power is either too costly or requires too much maneuvering to become a success. while designing these projects stakeholders rarely take into account the vital importance of distribution to make it a success.
  2. These design also minimizes the disruption of power supply. Production and distribution of hydro-power are done at different points making it easy to manage the disruptions. When there is a power shortage, it is easy to identify the area that is being affected thereby causing the shortage. Once identification has been done, it is easy to resolve the problem and go back to production in the shortest time possible. Perhaps this is the greatest advantage offered by the design of the project. For a country that had endured power shortages for decades, today they are at a minimum.

Twin-channel demander basin

This is the first of its design internationally. the Kali Gandaki project made good use of the constantly flowing Gandaki river to implement a twin basin. the twin basin idea arose from general concern that should one channel of the hydro-power project fail, the country would have to endure continued black outs again as the engineers resolve the matter. this led to various investors requiring a more sustainabale production design. the design itself was nto as complicated as many imagine but only included the introduction of a new channel to support the main channel in production. this provided the following advatages:

  • Power disruptions were completely curtailed. Citizens could be assured of continued supply of power since when one channel fails, the other continues functioning and supporting power distribution. This idea is of course borne out of the fear that the country would return to darkness.
  • The expected future demand for power has been well taken care of. should the demand increase however exponentially, the country will continue to enjoy a steady supply of electricity.

Political Influence

in 1996, there existed a conflict between the government of Nepal and Tibet. to many this conflict had nothing to do with the project but as (Asian Development Bank 1996) shows in the report, the conflict almost stalled the project. income that was vital for the project was often driven to support the government agenda in the conflict. the coflcit raged for a decade with a final. it is to be noted that this conflict played major role in the removeal of kingship and the declaration of Nepal as a republic under the united nations constitution. Two things arise from this situation:

  • As the kings and monarchy system of government faced criticism from the international community, the main agenda was the continued absolute poverty of the Nepalese. In an attempt to gain favor therefore, the government introduced the Kali gandaki project. (Fisher 1990) feels that this was an attempt to prove that the government indeed worked for the people. It is on this basis of creating a footing on which they could defend a monarchy government that the project became a success. government officials lobbied for its support from citizens and private instituitions alike while at the same time working hard to ensure the success of the project. in fact failure was not an option, the government had something to prove and they intended to prove it.
  • however in the same length, there are those institutions which had supported the monarchy goevrnemnt, when the political climate changed they chose to distance themselves from the King who was facing severe criticism. the government which has counted on their support therefore found that they had to seek alternative support. this is considred to be one of the reasons that the government sort foreign aid in support of the project.

The project did gain Gyanendra Bir Bikram Shah Support albeit for a few years. It was often quoted as his own idea and project, catering for the local citizen.

Was The Project A Success?

The main objective of the project which was provision of electrify to the country was found to have been successfully met. With the project producing at least 590 Gigawatts per year, the Nepalese citizens are enjoying a steady source of electricity which has in turn led to:

  • An increased National Gross product which has touted Nepal as a fast growing economy. While previously the country’s economic growth stumbled due to poor income generation, today its economy is growing stronger and is only stumbling due to severe national disasters that have haunted the country in the past five years. However, it should be noted that the recovery pace of the country is also quite impressive.
  • Decreased environmental hazards that come from the use of generators that are diesel powered in urban areas. The air pollution in the country was concerning in the years before the commissioning of the project. UNEP had shown general concern that disaster was looming in the country should the system continue as is (Salman and Uprety 2002). Today, the government has managed to do away with the reliance on diesel generators. In addition rural homes have shifted from the use of kerosene which is not only expensive but also a health hazard to the use of safer and more accessible electricity.

The project in itself is efficient, which means that it can sustain itself and has indeed proved to be more sustainable than was originally estimated. efficiency goes even to the monitoring and maintenance of the project, which though at first were considered to be too high in term of cost have since been considered as const effective. The country’s income supported by hydro-power continues to prorivide greatest advantage, improving the living standards of the citizens and the country as a whole. all in all Kali Gandaki can be said to have been a success.


Asian Development Bank. (1996). Summary environmental impact assessment for the Kali Gandaki “A” hydroelectric project in Nepal. Manila, Philippines, [Asian Development Bank

Asian Development Bank. (2000). Report and recommendation of the president to the board of directors on a proposed loan to the Kingdom of Nepal for the Small Towns Water Supply and Sanitation Sector Project. Manila, Asian Development Bank

Benamghar, R., Iimi, A., & Benamghar, R. (2011). Efficiency in Public Procurement in Rural Road Projects of Nepal. Washington, D.C., The World Bank.

Chandler, C. G. (1991). Appropriate technology for planning hydroelectric power projects in Nepal: the need for assumption analysis. Austin, Tex. (10100 Burnet Rd., Austin 78758), Center for Research in Water Resources, Bureau of Engineering Research, University of Texas at Austin.

Dhital, M. R. (2015). Geology of the Nepal Himalaya: regional perspective of the classic collided orogen. Cham [Switzerland] : Springer

Fisher, J. F. (1990). Sherpas reflections on change in Himalayan Nepal. Berkeley, University of California Press.

Kleinert, C. (1999). The impact of tourism and development on houses and settlement in the Kali Gandaki valley (central Nepal). Karakorum – Hindukush – Himalaya : Dynamics of Change. -Köln. -. 527-544.

Nepal, Regulating And Monitoring Capacity Building For Environmental Impact Assessment Of Hydropower Project In Nepal (Project), & Norway. (2006). A guide to environmental auditing of hydropower projects. Kathmandu, Govt. of Nepal, Ministry of Environment, Science, and Technology.

Nepal. (2008). Nepal, a profile of development partners. Kathmandu, Foreign Aid Co[o]rdination Division, Ministry of Finance, Govt. of Nepal

Nepal. (2014). Enhancing evaluation capacity in Nepal: proceedings of a series of three meetings held in Kathmandu, Nepal, during August and September 2013. National Planning Commission Secretariat

Rate this post