10th May 2025, Kathmandu
A new chapter in Nepal’s energy sector has been written with the successful completion of the 25 MW Seti River Hydroelectric Project. Located in the Kaski district, within Machhapuchhre Rural Municipality and Pokhara Metropolitan City, the plant is now officially operational and connected to the national electricity grid.
Seti River Hydroelectric Project Nepal
Project Overview and Timeline
The Seti River Hydroelectric Project, developed by Vision Lumbini Energy Company, began its construction in 2020. After years of dedicated effort, the project was officially completed, and power generation commenced in 2023. On 27th Kartik 2081 BS(12 November, 2024), the project was formally integrated into Nepal Electricity Authority’s (NEA) grid. Vision Lumbini Energy Company, registered as a public limited company in 2018, now has over 1,500 institutional investors as its shareholders, as stated by the company’s chairman, Jagat Pokharel.
Energy Generation Exceeds Expectations
Following the completion of the plant, the project began generating electricity. NEA started purchasing electricity from the plant on 27th Kartik 2081 BS. Since then, the plant has exceeded the initial energy production expectations outlined in its contract. It is now producing more power than anticipated, contributing to the national grid.
Electricity generated by the Seti River Hydroelectric Project is transmitted through a 132 kV transmission line, which runs over four kilometers to connect to the Laha Chok substation. From there, it flows into the national grid, ensuring widespread availability.
Investment and Financing
The project has a total cost of approximately NPR 6 billion, and it is expected to generate an annual revenue of NPR 87 crore during its first year of operation. The financing of the project was a mix of loans and equity investment. NMB Bank, along with the Employees Provident Fund (EPF) and Agricultural Development Bank, provided the necessary loans. The founding investors, including institutional shareholders, contributed the remaining 30% of the investment.
In total, 70% of the project’s cost was financed through loans, while 30% came from the equity investments of the founding members. This balance of loan and equity financing is an effective model that allowed the project to move forward without excessive financial burden.
A Significant Contribution to Nepal’s Energy Needs
The Seti River Hydroelectric Project stands as a significant contributor to Nepal’s growing energy demand. The country faces an increasing need for electricity as the population grows, and the economy expands. This hydroelectric project helps bridge the gap by adding renewable, homegrown energy to the national grid.
The project also contributes to reducing Nepal’s dependence on imported energy sources, a crucial step toward energy security. By investing in domestic hydroelectric power generation, Nepal moves closer to self-sufficiency in energy production. The plant helps ensure that energy is available to meet the country’s needs, even as they continue to rise in the future.
Praising Private Sector Involvement
During the inauguration ceremony, former Finance Minister Dr. Yubaraj Khatiwada, along with Ganesh Karki, the president of the Independent Power Producers’ Association of Nepal (IPPAN), commended the role of the private sector in energy production. They praised Vision Lumbini Energy for setting a high standard in the energy sector.
Dr. Khatiwada acknowledged the importance of private sector participation, especially in large-scale infrastructure projects like this one. Karki also highlighted the project’s potential to inspire other energy developers in Nepal. He mentioned that it sets a positive example for future power generation projects, showing that such investments can deliver tangible benefits to the country.
Sustainable Development and Long-Term Impact
This hydroelectric project is a prime example of how sustainable, renewable energy can support long-term development goals. As the global community continues to prioritize green energy, Nepal’s push for more hydroelectric projects is vital to its future. Not only does this project address the country’s immediate energy needs, but it also ensures that future generations will have access to clean, reliable electricity.
By prioritizing renewable energy, Nepal is making strides toward a sustainable future. Hydroelectric projects, like the Seti River project, reduce carbon emissions, supporting the country’s efforts to meet its climate goals. As Nepal focuses on energy independence, this project plays an essential role in strengthening the country’s overall energy security.
Looking Toward the Future
Looking ahead, the Seti River Hydroelectric Project will continue to be a key player in meeting Nepal’s growing energy demand. The country’s increasing energy needs require investment in additional projects, and the Seti River project is just one of many that will help Nepal achieve its long-term energy objectives.
Private sector involvement in such projects is likely to continue, as demonstrated by the success of Vision Lumbini Energy’s investment in this plant. Future hydroelectric projects will follow in the footsteps of this model, encouraging more investors to engage in Nepal’s energy sector.
Conclusion: A Milestone for Nepal’s Energy Sector
The completion of the Seti River Hydroelectric Project represents a major milestone in Nepal’s journey toward energy independence. The 25 MW plant is now fully operational and providing much-needed electricity to the national grid. With significant private sector investment and a well-executed financing plan, the project has set a high standard for future hydroelectric ventures in Nepal.
The plant is expected to generate substantial revenue and help reduce the country’s reliance on imported energy. As the project continues to operate, it will contribute to Nepal’s energy security and serve as a model for future energy development in the country.
By focusing on renewable energy and encouraging private sector investment, Nepal is laying the foundation for a brighter, more sustainable energy future. The Seti River Hydroelectric Project is proof that Nepal’s energy sector is moving in the right direction.
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