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ADB violates its own safeguard policies in Nepal Hydropower Project
A case study of the Tanahu Hydropower Project
by Sushovan Dhar
30 January 2024

The 140 MW Tanahu Seti Hydroelectric Project (THP) is located in the Tanahu District of Nepal’s Western Development Region. It is a storage type hydropower project with a capacity of 140 MW. As part of the project, a dam with a height of 140 metres would be constructed in the Vyas Municipality of Tanahun district. A 1,203-metre long tunnel will pass along the right bank of the Seti River for generating electricity at an underground powerhouse at Kunaute. The powerhouse will have two turbines with capacities of 70 megawatts each. It is expected that the contractors for the construction would be chosen by mid-October, 2017 and the scheduled date of completion is within December 2022. To transfer power to the National Grid, construction works of 37-km transmission line from the powerhouse site to Bharatpur sub-station is being planned.

The Project is situated on the Seti river of Vyas municipality near Damauli, the district headquarter of Tanahun (150 km west from the capital city of Kathmandu). Eight Village Development Committees (VDCs) and the Vyas municipality of Tanahun district are directly affected by the project.

According to the Environment Impact Assessment (EIA) Addendum, 2012, total 758 households will be affected. Among them, 86 households will be completely displaced from their ancestral land. The project will contribute to the loss of 660 metric tonnes of crop which will raise the issue of food security.

Table 1: Summary of the main features of the reservoir, dam and transmission line

1 Area of the reservoir 7.26 km2
2 Length of the reservoir 27 km
3 Dam height 420m from sea level
4 Dam height and length 140m and 170m respectively
5 Transmission line 37 km, 220 Kv
6 Access road to dam site 3 km

Source: NEA: project summary 2011(Pamphlet Nepali Version)

Table 2: Affected VDCs and Municipality

S.No.Name of the Affected VDCs and MunicipalityVillages in the Affected VDCs and Municipality
1 Vyas Municipality Beteni, Huksetar, Patan, Bisghare
2 Kahun Shivpur Thati, Patighar, Dharapani, Samidanda, Malinge, Banchare, Lokma, Syanlun and Gyajha
3 Pokhari Bhanjyang Simalswara, Belbase and Simalchaure
4 Rising Ranipokhari Tuttwa, Badarkuna, Jalbire, Jaruwapani, Risingpatan and Geruwater
5 Kot Durbar Bajhogara, Hukadi, Chap, Chilekama, Machadanda, Kortan
6 Majhkot Chorepatan, Saune and Dumsadi
7 Bhimad Khanaltar, Baghtar, Malebagar, Bhimad bazaar and Geruwapani
8 Chhang Thandiphant, Chanpatan, Tallotar, Jhakkas, Chimkhan and Pipale
9 Pokhari Bhanjyang Downstream impact

Source: THP, EIA, 2009

The total cost of THP is estimated at around 505 million US$ (ADB, 2013). Along with the Asian Development Bank (ADB), there are other partners who have financial investments in this project. One of the major funding partners is the Japan International Cooperation Agency (JICA) and the remaining partners are the European Investment Bank (EIB) and the Abu Dhabi Fund for Development (ADFD). The following table shows the investments of different financiers of this project.

Table 3: Financing Plan

S.NSourceAmount ($ millions)Share of total (%)
1 JICA 184 36
2 ADB (regular term loan 120m+hard-term loan 30m=150m) 150 30
3 EIB 70 14
4 GON/NEA 71 14
5 ADFD 30 6
Total 505 100

Source: (ADB, 2013)

The executing agencies are the Nepal Electricity Authority (NEA) and the Tanahu Hydropower Limited (THL). As described in the ADB’s project manual, the THL would execute the hydropower plant and all associated works, whereas the NEA would execute the transmission lines and the rural electrification program. According to the report and recommendation of the ADB president to the Bank’s board of directors, it is said that the Bank will facilitate all the procurement process including bid evaluation, contract negotiations and contract payment. In addition to ADFD, the EIB will fund the civil works whereas the JICA will fund all the powerhouse facilities. Furthermore, the same report says that the ADB will fund on its own or in conjunction with the government, the transmission lines, the community development, rural electrification programs and portion of land acquisition and settlement costs.

The ADB is an active player in this project and will take care of the supervision, procurement and assigning of experts. The ADB claims that the benefits would include expanded access to sustainable energy in Nepal through an increased efficiency and supply of reliable hydropower energy. The project outputs mentioned in the report are as follows:
- A 140 MW hydropower plant and related transmission system 37 km, 220 Kv
- Rural electrification covering 17,636 households
- Community development programme in the project area
- NEA restructuring
- Other sector reforms
- Equity sale scheme for hydropower development
- Technical assistance for achieving project outputs

The special feature mentioned for the THP is that all the policies of the ADB along with the other funding partners will be applied in the execution of this project.

Impact of the project

Tanahu Seti is a storage dam project and the reservoir will submerge land, community forest, communities, public structures and cremation sites etc. The dam will also regulate the river flow downstream. Thus, the project will have the following environmental and social impacts.

Land Acquisition

According to the EIA addendum 2012 prepared by the NEA and the THL, the total land required by the project is 828 ha. Out of this, the project implementation will have to acquire 112 ha and leasing of 19 ha of private land (THL and NEA, 2012). There is no mention of landless people who are living there for many generations without land certificates. It is found that lands in the Vyas Municipality and Kahun Shivapur have already been acquired by awarding cash compensation before 2014. Already, 156.8 million Nepalese rupees have been given to the landowners of the affected area immediately after the land compensation distribution was started in mid-February 2017. The government has allocated a total of 420 million Nepalese rupees for land compensation purposes of the project within the 2017 fiscal year.

There are people and community schools (Dipak Community Secondary School has occupied 216 ropani lands without any land-certificate) who are living there from many generations however, they do not have land certificates. According to the Land Acquisition Act, 1977 of Nepal, they are not entitled to compensation. As one of the locals said in Damauli, their land (Darai: marginalized community) was taken for establishing District headquarters and was compensated in cash but, the Darai community had no idea of managing liquid cash and did not have the wisdom to invest in alternative lands for survival. Finally they spent all the money and are now landless paupers around Damauli.

Public Resources and Infrastructure

According to the EIA addendum, 2012 prepared by the NEA and the THL, it is found that the project will entirely destroy suspension bridges, source of drinking water, access roads, foot trails, temples, and cremation sites. In addition, it is found from the EIA 2012 that this project will put pressure on public resources due to relocation of the affected households. It is already seen that due to tunneling work, the water supply is halted. The tunneling has already disturbed the groundwater flow reducing the water supply to a few hours a day instead of the previous 24 x 7 supply. It has been already pointed out in the EIA 2012 that the project will have major impacts on the environment and the livelihood at the project sites.

Involuntary Resettlement

According to the resettlement framework prepared by the NEA and the THL, about 758 households will be affected by this project. The framework further says that out of these 758 households, 86 households will be physically displaced and relocated in their current village. The report further says that the affected households are rated as indigenous and vulnerable. In addition, the EIB’s report also confirms that the majority of the affected people belongs to indigenous groups whose social and cultural ways would be jeopardised. During a field visit, it was found that 19 families in Wantang Khola of Rishing Ranpokhari VDC, 7 families in Chhang VDC as well as in Beltar of Kahun Shivapur, Bhimad and Jamune VDCs are in this endangered list.


This project will gravely impact the livelihoods of the affected population. The means of livelihood affected by the project are agriculture, fishing, fuel wood and fodder collection. Majhi, Bote, Danuwar and Darai are indigenous and marginalized fishermen known as vulnerable groups in Nepal depending entirely on the rivers for their livelihood. They cannot survive without the rivers and most of them are landless. Fishing is their ancestral profession. Fodder, Cattle rearing, manure production and agriculture are interlinked. If one is affected the entire cycle is upset.


According to the EIA addendum 2012, the project will have impacts on the aquatic ecosystem, terrestrial ecosystem and the habitat of fauna and flora. It further says 400.3 ha of forests will be lost containing 162,000 trees, 18.7 ha of shrub land and 94.3 ha of grassland. There would be serious impediments to fish migration which is a matter of serious concern. There are altogether 36 species of fish, out of which six species migrate from afar, six from a short distance and the rest are found in the Seti river. The project will hamper the free migration of fish and also result in loss of population. According to the IUCN there are endangered and nearly threatened species.

Culture and religion

Most of the people are Hindus by religion however, there are also Buddhists and Muslims. The cremation sites and the temples will be destroyed causing distress to the people. The intervention by the project will bring new culture to the project sites and affected areas potentially upsetting the original culture practiced over there.


It is undeniable that there is a severe power crisis in Nepal and the majority of the rural people don’t have access to electricity. Therefore Nepal cannot just say no to dams; however, it can avoid disastrous dams. The local people are demanding adequate information, timely notification, inclusive and meaningful consultation and interaction regarding this project. They are still struggling to get the entire project documents including full volumes of the EIA, IPPF, Resettlement Plan as well as the ADB, EIB and JICA’s guidelines and safeguards in local language. The locals want a guarantee of their livelihood and best prices for their lands and schemes to revive their means of sustenance. They demand electricity, employment in the project and regular income generation sources to lead a decent life.

The ADB, JICA and EIB have policies and safeguards which complement each other advocating poverty reduction and saving environment. Projecting grand visions for the people, environment and society it claims that it is accountable and/or it will make the borrower/client accountable to all its core safeguard policies. However these pledges are clearly violated in the case of the Tanahu Seti project. Although the project is in the implementation phase, it is already observed that in the planning and preparation phase, many of the ADB’s policies have been violated regarding communication, consultation, participation and prior notification. This project needs to be scrutinized by citizen’s groups and external bodies so as to ensure that the affected people, environment and the society get what they lawfully deserve.

Sushovan Dhar