Nepal Restores $2.5 billion Hydropower Plant Contract to Chinese firm where Nepal’s new government has reversed its predecessor’s decision and has asked China Gezhouba Group Corporation to build the nation’s biggest hydropower plant, reportedly. It seeks to woo Chinese investment in its ailing infrastructure where the $2.5 billion deal with the Gezhouba Group to build the Budhi Gandaki hydroelectric project which was scrapped earlier by the previous government, citing lapses in the award process. State-run Nepal Electricity Authority (NEA) was to have built in.
Prime Minister K.P. Sharma Oli, seen as China-friendly, pledged to revert the project to the Chinese company if he was elected to power in last year’s elections. Oli became prime minister in February after his Nepal Communist Party scored a landslide poll victory. China and India are both jostling for influence in Nepal by providing aid and investment in infrastructure projects. Officials said a formal construction deal will be signed on the hydropower project after the government had negotiated the project modalities with the Chinese company. No further information or details were given on any other development regarding this project.
Nepal’s rivers, cascading from the snow-capped Himalayas, have vast, untapped potential for hydropower generation, but lack of funds has made Nepal lean on neighbour India to meet the annual power demand of 1,400 megawatts (MW). The 1,200 MW plant on Budhi Gandaki river, about 50 km (32 miles) west of Kathmandu, is meant to address acute power shortages that have marred economic growth in one of the poorest countries in the world. Nepal wants the Budhi Gandaki project to be part of the Belt and Road initiative (BRI), President Xi Jinping’s landmark scheme to connect China to the rest of Asia and beyond, to which it signed up last year.
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