The construction of the Arun III Hydropower Project was uncertain due to opposition from NGOs and campaigners advocating for environmental and development project impacts. The opposition to Arun, which was initiated by the Nepali Congress-led government formed in 2048, was not only from NGOs but also from the then main opposition party in parliament, the UML.

They had internationalized the idea that Arun should not be built by borrowing, saying that it would damage the local environment and that the overall achievement of the project was not in the interest of Nepal. A proposal was made to build Arun with a loan from the World Bank. At that time, UML heated the streets and the parliament, saying that Arun was not in the interest of Nepal. NGOs and some locals also conducted activities against Arun.

After forming a nine-month government in 2051, UML had put forward a proposal to build Arun by changing the loan given by the World Bank and the provisions it would keep. While discussions were going on, the UML government collapsed and Congress parliamentary party leader Sher Bahadur Deuba became the Prime Minister in Bhadra 2052.

When Arun was uncertain, the final efforts were being made to implement the Kaligandaki Hydropower Project during Deuba's prime ministership. Although the process had started before Deuba came, it had not been completed. At that time, Pashupati Shamsher Rana was the Minister for Water Resources. Water resources experts said that if the Kaligandaki, which is in the process of being built, it would ease electricity supply.

Kaligandaki, which was estimated to cost about 400 million US dollars including interest during the construction period, had a capacity of 144 MW. At that time, the private sector had not yet built the projects. Discussions were underway on a proposal to build Kaligandaki with the help of international lenders and donor countries.

In this context, NGOs that had been lobbying for a long time not to build Arun had turned to Kaligandaki. Gopal Siwakoti of an NGO named Inhured had raised various questions about Kaligandaki. Based on this, officials from the Ministry of Water Resources said that the NGOs that had failed Arun were again active in aborting Kaligandaki in its infancy.

Anantaraj Poudel, spokesperson for the Ministry of Water Resources, claimed that the Kaligandaki was the best project in Nepal at the time. A team from Japan had come to Nepal to study the project. The Asian Development Bank had also promised to provide $120 million in assistance. Before the political changes in 2008, Nepal's total electricity generation capacity was only 2.25 MW. That is why the government was forced to invest in electricity generation by attracting the domestic private sector or bringing in foreign investment.

The government or the Electricity Authority did not have the financial resources to build large projects. Some NGOs and water resources experts were also raising the voice of finding ways to reduce costs. They were also demanding that the cost-related measures be made public.

The Electricity Authority and the government had already jointly constructed a 28-km road from the Siddhartha Highway to reach the project. The locals of Syangja had been given all the information after two extensive discussions on the project. But NGOs were raising the issue of economic, social and environmental impacts of the project.

The same issue was raised in Arun too. The Electricity Authority had been claiming that since most of the Kaligandaki water would be taken to the power house through a tunnel and the water released from there would be released into the river, there would be serious environmental damage. Eight families of the Bote caste were displaced during the construction of the project road. They were given compensation for their houses and huts. Shankar Prasad Pandey, the MP who won from Syangja, was of the opinion that the problem of Guthi land should be resolved. Poudel, spokesperson for the Ministry of Water Resources, had also informed that Nepali technicians were capable of constructing the project.

Poudel claimed that Nepali technicians were also capable of constructing the Kaligandaki as Nepali technicians were involved in the construction of the Pua Khola in Ilam, Modi in Parbat, and Chilime in Rasuwa. Government officials had been saying that after Arun, Kaligandaki was also at increasing risk of being targeted by campaigners. The Kantipur Daily published a news report prepared by journalist Rajendra Sunuwar on the government's efforts to raise financial support for the construction of Kaligandaki, along with the issues raised by NGOs, under the title 'Non-governmental organizations active to demolish Kaligandaki 'A' too' on Chaitra 2, 2052.