Floods Damage Hydropower Projects in Nepal Affecting Public Investments

Floods that occurred on August 26 caused damage to thirteen hydropower projects across Nepal, with six of these projects owned by companies listed on the secondary share market. This situation has exposed thousands of public investors to financial losses, as reported by Online Khabar English on September 20.

The affected publicly listed companies include Rasuwagadhi Hydropower Company, Chilime Hydropower Company, Trishuli Jal Vidhyut Company, Mailung Khola Hydropower Company, Upper Mailung Khola Hydropower Company, and Sanjen Hydropower Company. These companies operate projects ranging from five megawatts to 111 megawatts.

Extent of Damage to Hydropower Infrastructure

Online Khabar English indicates that initial assessments show severe damage or destruction to various components of these hydropower projects. This includes dams, tunnels, powerhouses, critical machinery, and transmission infrastructure.

Specifically, Rasuwagadhi, Chilime, and Trishuli Hydropower have experienced particularly extensive damage. Such widespread damage means that electricity generation from these facilities has been disrupted.

Financial Consequences for Companies and Investors

The floods have created a challenging financial outlook for the affected hydropower companies. Online Khabar English noted that the share prices of these six companies have fallen significantly since August 26, with declines ranging from 4.25 percent to 30.48 percent.

• Rasuwagadhi Hydropower Company saw a 27.09 percent decline.
• Chilime Hydropower Company experienced a 22.18 percent fall.
• Trishuli Jal Vidhyut Company shares dropped by 30.48 percent.
• Mailung Khola Hydropower Company recorded a 22.78 percent decrease.
• Upper Mailung Khola Hydropower Company shares were down by 14.03 percent.
• Sanjen Hydropower Company had a 4.25 percent reduction in share price.

The companies face the dual challenge of servicing existing bank loans, which amount to billions of rupees, while needing to secure additional funding for reconstruction. Rebuilding costs are anticipated to be higher than the original project expenses, partly due to increased equipment prices, according to Narnath Neupane, company secretary of Rasuwagadhi Hydropower Company, as reported by Online Khabar English.

Implications for Travellers in Nepal

This situation primarily highlights economic impacts within Nepal and does not directly affect the safety or accessibility of popular trekking destinations or adventure activities for travellers. The damaged hydropower projects are infrastructure assets rather than tourist attractions or direct travel routes.

Travellers currently in or planning a trip to Nepal should be aware that monsoon season can bring heavy rains and localized flooding, which can impact roads or infrastructure in specific areas. However, the current reports do not indicate widespread travel disruptions related to these particular hydropower project damages.

It is always recommended to stay informed about local weather conditions and consult with your trekking or tour operator for the most current information regarding specific routes and regions you plan to visit. There is no indication that these particular flood damages will affect general electricity supply for tourists in major hubs like Kathmandu or Pokhara.

Future Outlook for Hydropower Sector

The long-term impact on the hydropower sector includes the challenge of zero electricity generation and revenue for several years while reconstruction efforts are underway. Companies also face the issue of generation licences continuing to run down even without production, as noted by Online Khabar English.

The rebuilding process is expected to be lengthy and costly, requiring significant financial restructuring and potentially new loans, which will add to the debt burden of these companies.