The government is going to build the 1200 MW Budhi Gandaki Hydropower Project under the authority model, for which the investment modality has been approved. On 15 Jestha, Finance Minister Swarnim Wagle, while presenting the budget for the upcoming fiscal year in Parliament, said that the project would be built under the empowered authority model. 

Earlier, while presenting the budget for the current fiscal year, the then Finance Minister Bishnu Poudel had said that the project would be built under the public-private-partnership (PPP) model. With the change of government, the model for building the project has also changed . 

Former Energy Secretary Anup Upadhyay says that the Budhi Gandaki Hydropower Project Authority will not be built. Upadhyay has suggested that the investment made so far in the project be called government investment and that the remaining investment be sought. ‘Keep talking to India about downstream benefits, the talks will go on for years,’ he wrote in X.

The Budhi Gandaki Reservoir Hydropower Project, which was put forward as a national pride project in the fiscal year 2069/70, is targeted to be completed in the fiscal year 2083/84. At that time, the total cost estimate was Rs 260 billion, as mentioned in the 60th report of the Auditor General's Office. However, the construction model of the project, which was supposed to be completed in the coming fiscal year, is being changed after 9 years.

An Energy Ministry source said that there should be no 'lingering' in the name of the Budhi Gandaki Authority, whose investment modality has been approved. 'Budhi Gandaki, which is stuck in the investment modality, has now been approved and has moved forward, it should not be entangled in the name of the Authority again,' said an official from the Energy Ministry, 'We have a clear need for such projects for the dry season.' Even though the government has said the Authority model, it will take time to implement the act and law for that, so there is no way to slow down the pace of Budhi Gandaki now, the source said. 

The interim government formed after the Gen-G movement had approved the modality of the Budhi Gandaki project in Bhadra. The cabinet meeting held on 2 Magh and 12 Falgun 2082 had decided to approve the financial investment framework of the project. Although the decision was made on 2 Magh, the verification could not be done. On 9 Chaitra 2082, the Ministry of Energy, Water Resources and Irrigation sent a letter approving the financial investment framework of the project to the project promoter Budhi Gandaki Company. 

Saying that the authorized authority is a positive issue, the company's CEO Arun Rajouria said. 'We have already started the preparatory work for the development of the project,' he said, 'We are ready to go once the authority is established.'

Energy Minister Biraj Bhakta Shrestha said that it is not financially viable in the current situation if only electricity is generated from Budhi Gandaki. 'The government does not look at it only from an economic perspective. "We look at it from a multi-dimensional perspective, including energy security," he said. "Budhi Gandaki is needed for reliable energy and dry season. It is strategically located in a very good place. Because it can supply Pokhara, Chitwan, and Kathmandu, which consume more electricity."

Stating that Budhi Gandaki is needed for reliable energy and dry season, he also said that Rs 46 billion should be invested in a single project. He also said that everything from water tourism to urban development can be done through the NEA. On the other hand, he said that reducing the height of the current dam a little bit will reduce the cost and will not have much impact. He said that the capacity of the project could also decrease a little.

The conclusion of the discussions held with the ministries of urban development, home, finance, agriculture and others was that how can additional investment be made only in terms of electricity generation? How can it be done in an integrated manner, he said. He said that integrated projects including fisheries and tourism can be taken forward along with electricity generation through the NEA.

The basic cost of the project to be built in Dhading and Gorkha is $2.77 billion (about Rs. 374 billion). The construction period of the project is 8 years. The company says that the project will cost Rs. 46 billion, including interest during the construction period. The modality has been prepared so that the loan and equity (equity) ratio is 70 and 30 percent, based on the total cost, including interest during the construction period. 

The government of Nepal will own 80 percent of the shares in the Budhi Gandaki Company Limited, the promoter of the project, and Nepal Electricity Authority will own 20 percent. After the project is completed or in the final stage of construction, taking into account the actual financial indicators, a certain percentage of shares will be issued to the general public based on suitability and feasibility to reduce the debt burden or restructure the government's share, the modality states.

The government will invest Rs. 248 billion in the project, including Rs. 97.47 billion for equity and Rs. 150 billion for concessional loans. The government's investment in the project so far in the project has been converted into share investment in the company. The government will have to ensure the source of Rs 228 billion in the project by reducing the current investment. 

The Electricity Authority will invest Rs 24.37 billion in equity in the project. It is said that the project will be funded by issuing shares of the Electricity Authority, issuing energy bonds, taking loans from banks and financial institutions, providing concessional loans by the government, the amount collected from the infrastructure tax imposed on petroleum products, issuing shares to foreign employed and non-resident Nepalis and the general public.