KATHMANDU: The Karnali Chisapani Hydropower Project is South Asia’s largest hydropower initiative. It has been in development in Nepal for nearly six decades. The 10,800-megawatt project could revolutionize Nepal’s energy exports. It also promises to boost foreign investment and transform irrigation sectors.
Despite its transformative potential, the project remains unrealized. It remains unclear whether Nepal will finally break the deadlock and bring this hydropower vision to life. During the 38th-anniversary ceremony of the Nepal Electricity Authority (NEA) on August 18, 2023, the government expressed its commitment to advancing the study of the project internally. Here are the key facts of the Karnali-Chisapani Hydroelectric Plant:
Karnali-Chisapani: Nepal’s Mega Hydropower Dream on Its Longest River
The Karnali-Chisapani Multipurpose Project (KCMP), planned on Nepal’s longest and most powerful river, is poised to become one of the largest hydropower projects in the world. Located in western Nepal, this ambitious initiative aims to revolutionize Nepal’s energy production, enhance irrigation, and bolster cross-border electricity trade. With a massive 10,800 MW capacity, the project represents Nepal’s boldest step toward energy security and economic transformation.
Designed as a high concrete dam with reservoir storage, the project will stand 270 meters tall, making it one of the world’s tallest dams. The reservoir will cover approximately 150 square kilometers, storing 12.5 billion cubic meters of water, ensuring stable electricity generation and seasonal water regulation. The project is expected to generate 40,000 gigawatt-hours (GWh) annually, enough to power over 10.8 million households. Nepal’s growing energy needs will be met with ease, while surplus electricity will be exported to India and Bangladesh, strengthening regional energy cooperation.
Beyond power generation, the Karnali-Chisapani project will play a vital role in irrigation and flood control. The regulated water flow will provide 400,000 hectares of farmland in Nepal’s Madhesh region and India’s Uttar Pradesh with a reliable water supply, transforming agricultural productivity. The reservoir’s flood mitigation capabilities will help prevent $500 million in annual damages in downstream areas, offering protection to vulnerable communities.
The project also carries a game-changing potential for inland navigation. A proposed 200-kilometer navigation canal could connect Nepal’s reservoir to India’s Ganges basin, enabling cargo transport and unlocking new trade routes. Additionally, the installation of 2,000 kilometers of high-voltage transmission lines will integrate Nepal’s national grid while facilitating electricity exports of 3,000 MW to India and 2,000 MW to Bangladesh.
With an estimated cost of $10–12 billion, the Karnali-Chisapani project is Nepal’s most ambitious infrastructure endeavor. The investment is expected to yield long-term economic gains, reduce reliance on fossil fuels, and position Nepal as a key player in South Asia’s energy market. If successfully executed, the project will not only secure Nepal’s energy future but also mark a historic shift in its economic and regional influence.
Nepal Faces Major Hurdles in Financing and Expertise for Karnali Chisapani Mega Hydropower Project
The Karnali Chisapani Hydropower Project, a game-changer for regional development, has been under discussion for over six decades. However, its massive scale is posing significant challenges for Nepal, as domestic resources and expertise fall short for a project of this magnitude. The Nepal Electricity Authority (NEA) has launched a fresh study on the ambitious 10,800 MW project, which is expected to cost around Rs 1,147 billion.
Despite the NEA’s extensive experience in hydropower development, with successful projects like the 456 MW Upper Tamakoshi and Upper Arun under its belt, the proposed Karnali Chisapani project is a different beast altogether. Domestic capabilities will not suffice, and international investment is crucial.
In response to the funding challenges, Indian industrialist Gautam Adani’s Adani Group has shown a keen interest in Nepal’s hydropower sector. The group has proposed investments in large-scale hydropower projects, cross-border transmission lines, and internal infrastructure. While Adani representatives have visited Kathmandu multiple times, they have yet to reveal local partners or specific plans. Their initial focus is on the Karnali Basin, with a proposed investment in 1,000–2,000 MW hydropower projects.
Nepal, however, has suggested starting with smaller projects, such as the 480 MW Fukot Karnali, before progressing to the larger developments that could reshape the region’s energy landscape.
The Karnali-Chisapani project has evolved significantly from its initial concept to today’s mega-hydropower vision. With an estimated potential of 10,800 MW, it stands as Nepal’s largest and most strategically important energy project.
The Karnali-Chisapani Multipurpose Project (KCMP) has undergone a decades-long evolution, beginning in the 1960s with various feasibility studies and culminating in its recognition as one of South Asia’s most ambitious hydropower projects today.
Originally, a 1,800 MW project was proposed by Japan’s Nippon Koei Co. Ltd. in the 1960s. However, subsequent studies expanded its scope significantly. By 1989, feasibility reports estimated a potential capacity of 10,800 MW, marking it as a game-changing initiative for Nepal’s energy future and regional power trade.
This timeline reflects the technical, economic, and geopolitical complexities of developing such a massive infrastructure project, which is now envisioned as a transformative solution for energy security, irrigation, and economic development in Nepal and beyond.
Past Studies & Historical Milestones
1. 1960s: Initial Feasibility Study (UNDP/World Bank)
•The study recommended postponing development until Nepal’s economic and governance conditions improved.
2. 1980s: Pre-Feasibility Study by Nepal Electricity Authority (NEA)
•Bilateral and multilateral funding due to Nepal’s limited financial capacity.
3. 2000s: Environmental Impact Assessment (EIA) & Social Impact Studies
•Introduce biodiversity offsets and ecological protection measures.
4. 2015: SAARC Energy Centre Review & Regional Integration
•Advocated for cross-border transmission infrastructure to facilitate energy exports.
5. 2022: Updated Feasibility Study (SAARC/Nepal Govt)
•Establish transboundary water-sharing agreements with India and Bangladesh to optimize benefits.
A Reservoir the Size of 150-square-kilometer
The Karnali-Chisapani Multipurpose Project (KCMP) is set to create a 150-square-kilometer reservoir—stretching 50 kilometers upstream and submerging rural areas, farmlands, and ecosystems across multiple districts.
The proposed at Chisapani Gorge in Surkhet, near the Nepal-India border, the 270-meter-high dam will be one of South Asia’s tallest, storing 12.5 billion cubic meters of water for year-round power generation, irrigation, and flood control.
The proposed reservoir for the Karnali Chisapani Hydropower Project will be located nearly two kilometers upstream of the Karnali Chisapani Bridge, which connects Bardiya and Kailali districts. The project plans to dam the Karnali River with a 270-meter-tall rock-fill dam, as outlined in the latest study by the Nepal Electricity Authority (NEA). The reservoir will span 167 kilometers, covering 100 kilometers along the Karnali River, 45 kilometers along the Bheri River, 16 kilometers along the Seti River, and six kilometers along the Thuligad River.
Spanning 2,500 square kilometers, the project will impact districts like Dailekh, Jajarkot, and Salyan. The Karnali River, with its 1,500 cubic meters per second flow, will drive massive energy production while irrigating 400,000 hectares of farmland across Nepal and India. KCMP is more than a hydropower project—it’s a transformation of Nepal’s energy and agriculture future.Nepal’s hub to energy export and Economic Transformation
The proposed Karnali Chisapani Hydropower Project is ambitious hydropower initiative represents more than just an energy project—it is Nepal’s pathway to economic independence, industrial growth, and regional leader of energy export to sustainable energy production. Karnali Chisapani could usher in a new era where Nepal transitions from an energy importer to a regional power exporter, shaping the country’s economic landscape for generations to come.
That project could redefine the country’s economic future. Designed to be one of the world’s largest hydropower plants with far-reaching benefits spanning energy security, energy experts, economic growth, job creation, and regional cooperation, the Karnali Chisapani project could be the catalyst Nepal needs to enter a new era of prosperity.
The Karnali Chisapani project is set to generate an estimated 40,000 gigawatt-hours (GWh) of electricity annually, enough to power over 10.8 million households. Given Nepal’s current electricity consumption, this surplus energy opens the door for large-scale exports. With plans to sell 70% of the generated power to India and Bangladesh, Nepal stands to earn an estimated $2.1 billion annually at an average export rate of $0.07 per kilowatt-hour. This revenue would significantly boost Nepal’s foreign exchange reserves, reducing reliance on imported energy and strengthening the economy.
Beyond electricity generation, the project will help Nepal achieve energy security by minimizing power shortages, reducing dependence on fossil fuels, and ensuring uninterrupted electricity supply to households and industries. The integration of a 2,000 km high-voltage transmission network will further enhance energy distribution, connecting Nepal’s eastern and western regions while also linking with India and Bangladesh’s power grids.
The scale of the Karnali Chisapani project is unprecedented in Nepal’s history, both in terms of infrastructure investment and economic impact. The project is expected to contribute 2-3% to Nepal’s annual GDP, generating significant employment opportunities across multiple sectors. During its construction phase, the project will directly employ over 20,000 workers, with an additional 50,000 indirect jobs expected in logistics, hospitality, and service industries.
Industrial growth is also set to receive a major boost. The availability of affordable electricity is likely to attract foreign direct investment (FDI) worth $3 billion into Nepal’s manufacturing sectors, including cement, steel, and textiles. The project itself will require 1.2 million tons of steel, an amount equivalent to the construction of 12 Golden Gate Bridges, underscoring the sheer scale of resources involved.
Beyond power generation, the Karnali Chisapani project is expected to transform Nepal’s agricultural sector. The vast reservoir created by the dam will provide irrigation for 400,000 hectares of farmland across Nepal’s Terai region and India’s Uttar Pradesh. This will significantly boost agricultural productivity, with experts estimating an additional $500 million in annual agricultural output.
The project also offers critical flood protection, mitigating the risks associated with the Karnali River’s seasonal swelling. The dam’s 12.5 billion cubic meter water storage capacity is projected to prevent an estimated $500 million in annual flood damage to downstream areas, benefiting both Nepal and northern India. Additionally, during dry seasons, the reservoir will serve as a lifeline for 10 million people, ensuring consistent water availability in regions prone to drought.
If successfully executed, the Karnali Chisapani Hydropower Project will mark a turning point in Nepal’s geopolitical and economic standing. The ability to export clean energy to India and Bangladesh strengthens Nepal’s position in regional trade and diplomatic negotiations, fostering deeper economic ties. The project could also lay the groundwork for future initiatives, including inland water transport networks connecting Nepal to India’s Gangetic plains, enhancing trade routes and logistics efficiency.
