Study on Irrigation and Hydropower Trade-off

Prachanda Pradhan Rashmi Shrestha Pravakar Pradhan

August 1, 2018 Preface

While discussing on the hydropower benefit sharing study that was undertaken by ICIMOD is to see how benefits are shared and their implications of implementation. In course of the study, it was felt that there is important issue of hydropower and irrigation trade-off. There are several interesting cases in Nepal to look at the benefit sharing between Hydropower and Irrigation. Some of them have presented excellent condition of complementing each other. In other case, irrigation has to suffer from the hydropower development. Within this context, this study is undertaken.

Hydropower of 2-69 MW were the candidate systems for reconnaissance. River basin transfer systems to run- of- the river systems were visited. Interview with the stakeholders conducted. Based on type of management, the private sector managed Hydropower systems make effort to bring a win-win situation. Negotiations between the hydropower and irrigation were held. Agreements were concluded. There are some very ideal systems like Andhi Khola which has made effort to balance the maximum benefit from both irrigation and hydropower. They go together. In other case, they are considered as separate entity. It might be reflection of the sectoral organization of decision making agencies.

While going through the study, it is felt that in order to ensure the win-win situation, effort has to make to implement IWRM policy, basin planning and, water accounting in the river systems as the tools for decision making in these sectors.

We would like to thank Dr. Aditi Mukerji of ICIMOD for giving us the opportunity to undertake this study.

Her intellectual support and guidance during the study is acknowledged. Mr. Devesh Belbase deserves thanks for accompanying us in the field and engaged in discourses on the irrigation and hydropower trade-off.

Ms. Sarita Joshi deserves thanks for providing logistic support for this study.

i Table of Contents

Chapter Title Page

I Study on Irrigation and Hydropower Trade-off in Nepal 1 1.1 Why this Study 1 1.2 Scope of the Study 1

II Methodology of Study 3 2.1 Literature Review on Trade-off between Hydropower Generation and 3 Irrigation for Food Production 2.2 Hydropower and Irrigation Development in Nepal 5 2.3 Emergence of Competitive use of Water between Hydropower and 5 Irrigation 2.4 Priority of Water Uses in Nepal 8 2.5 Typology of Hydropower and Irrigation Trade-off 9 2.6 Factors Influencing Hydropower Irrigation Trade-off in the Run of the 10 River Systems 2.7 Key Informants from the Sites and Project Offices were Planned 11 2.8 Selection of Candidate Systems for Reconnaissance Study 12

III Experiences from other Countries including Mekong River Countries 13 3.1 General Information 13 3.2 Construction of Hydropower Stations in Mekong Basin 14 3.3 Agriculture Practices in the Mekong Basin 15 3.4 Trade-offs between Hydropower and Irrigation Sectors 16

IV Findings of the Reconnaissance Study 18

V Detail Case Study of Hydropower Systems 22 5.1 Seven Schemes for Detail Study 22 5.1.1 Marsyangdi Hydropower Project 22 5.1.2 Aadhi Khola Hydropower and Irrigation 23 5.1.3 Jhimruk Hydropower Project 27 5.1.4 Bheri-Babai Multipurpose Diversion Project 33 5.1.5 Chatara Hydropower Project at Sunsari-Morang Irrigation System 35 5.1.6 Puwa Khola Hydropower Project, Ilam 38 5.1.7 Panauti Hydropower Project, Khopasi, Kavre 40

VI Synthesis of Case Study Findings 43 6.1 Historical Context and Their Types 43 6.2 Water Source for Hydropower Generation 43 6.3 Water Sharing Among the Sectors 44 6.4 Water Allocation Policy and Basin Planning 45 6.5 Basin Organization for IWRM 45 6.6 Benefit Sharing Among the Sectors 46

ii 6.7 Public Hearing System 46 6.8 Management of the Sectors 46

VII Local Benefit Sharing between Hydropower and Irrigation 47

VIII Conflicts in Hydropower and Irrigation Trade off Study 49 8.1 Conflicts Identification 49 8.1.1 Water Right Related Conflicts 50 8.1.2 Conflict due to Lack of Inter-agency Coordination 50 8.1.3 Application of New Law in Old Systems and need of Common 50 Platform for Sharing Information 8.1.4 Conflict Related to Water Allocation 51 8.1.5 Conflict due to Inadequate Water Supply due to Inappropriate 52 Infrastructure 8.1.6 Conflicts Related to Policy Ambiguity in Management 53

IX Conclusion 54

References 58

Annex 1: Hydropower Installed Capacity 63 Annex 2: Checklist for Trade-off between Hydropower and Irrigation 64 Annex 3: Reconnaissance Study of 20 Hydropower Systems 65 Annex 4: Three Case Studies from Mekong River Basin on Trade-offs between 91 Hydropower and Irrigation Annex 5: Interviewed Personnel during Reconnaissance Study 95 Annex 6: Mai, Jog Mai and Puwa Khola Water Infrastructure Development 98 Annex 7: Local Benefit Sharing in Hydropower Projects 99 Annex 8: Handover Report on Electricity Power House and Understanding between 101 Nepal Electricity Authority and Sunsari Morang Irrigation Project

iii Abbreviations

ADB Asian Development Bank AHP Andhi Khola Hydropower AIS Andhi Khola Irrigation System AKWUA Andhi Khola Multipurpose Water Users Association AMIS Agency Managed Irrigation Systems ARD Associate Rural Development BBDMP Bheri Babai Diversion Multipurpose Project BEW Butwal Engineering Works BPC Butwal Power Company BS Bikram Sumbat BTI Butwal Technical Institute CDKN Climate and Development Knowledge Network CHA Chatara Hydropower Station CMC Chatara Main Canal CSR Corporate Social Responsibility DoED Department of Electricity Development DOI Department of Irrigation FAO Food and Agriculture Organization FMIS Farmer Managed Irrigation Systems FY Fiscal Year GIZ Deutsche Gesellschaft für Internationale Zusammenarbeit GoN Government of Nepal GWh Gegawatt hour HMGN His Majesty of Government of Nepal ICEM International Centre for Environmental Management ICIMOD International Centre for Integrated Mountain Development IEA International Energy Agency IPP Independent Power Producers IUCN International Union for Conservation of Nature IWMI International Water Management Institute IWRM Integrated Water Resources Management IWUA Irrigation Water Users Associations JDMP Jhimruk Downstream Mitigation Program JICA Japan International Cooperation Agency JIDCO Jhimruk Integrated Development Center

iv JVS Jalsrot Vikas Sanstha km Kilometer kW Kilowatt lps Litre per second MoE Ministry of Environment MoI Ministry of Industry MRC Mekong River Commission MW Megawatt NCDC Namsaling Community Development Center NEA Nepal Electricity Authority NHAM Norway Himalayan Asia Mission NORAD Norwegian Agency for Development Cooperation NPCS Nepal Planning Commission Secretariat NVE Norwegian Water Resources and Energy Administration NWP National Water Plan PDR People’s Democratic Republic PKHI Puwa Khola Hydropower Intake PKHS Puwa Khola Hydropower Station RJKIP Rani, Jamara and Kulariya Irrigation ROB River Basin Organization NRs. Rupee SMIP Sunsari Morang Irrigation Project SUP Social Upliftment Programme TMB Tunnel Boring Machine UMN United Mission to Nepal UNEP United Nation Environment Programme USAID United States Agency for International Development VDC Village Development Committee WB World Bank WECS Water and Energy Commission Secretariat WUA Water Users Association WWF World Wildlife Fund

v Chapter I

Study on Irrigation and Hydropower Trade-off in Nepal

1.1 Why this Study?

Nepal is rich in water resources. They have been used in irrigation for food production and water mills for food processing and micro-hydropower projects for lightening and domestic use. A few hydropower stations of small capacity were constructed in 1911 and after. Recently, many hydropower projects of different capacities have been constructed by securing generation and construction licenses in large number of rivers. They are usually of run of the river types. Hence, water related infrastructures are in the river systems are increasing compared to 10 or 20 years ago. Now, hydropower, irrigation and drinking water projects are competing each other for the same source of water. With the availability of energy in the nearby area, availability of modern irrigational technologies, the land once considered unfeasible to be irrigated in the past are being made feasible raising the possible water usage issues among different users in the riparian area.

It is now appropriate time to see how can there be a better Trade-off between the hydropower use of water and irrigation use of water. Over 6000 river systems are found in Nepal, the first hydropower came about 107 years ago. Three more systems were added in the subsequent 58 years period after the first hydropower project. There were thousands of irrigation systems in these rivers and streams. In 2018, altogether 178 hydropower systems are either in operation or under construction in those river systems where quite a few of those irrigation systems also exist. Therefore, the intra- sector coordination and management framework among sectors such as hydropower and irrigation is needed. Thus, a broader framework which contains mechanism for cost and benefit sharing to balance the trade-off must be arranged to address the issue. If proper attention is not given in time, there will be a number of adverse competitions on water resources utilization in those river systems in Nepal. At present, it shows a strong sectoral approach in water resources utilization.

1.2 Scope of the Study

The scope of the study include

1. Undertaking a literature review on the issues of hydropower-irrigation nexus by drawing in evidence from Nepal, as well as in other countries in the region and the other similar areas, such as the Mekong Basin where a spate of hydropower construction is going on. 2. A quick study and survey of up to 20 hydropower schemes (differentiated by size – from 5 MW to upto 50 MW; ownership – NEA vs. private; timing of operation – ones that have been operational for more than 15 years to ones that are still under construction) with associated irrigation schemes (differentiated by ownership – FMIS schemes vs. Agency Managed

1 schemes; by size – small vs. medium schemes and by impacts: win-win vs. widespread conflicts) and develop a typology of irrigation-hydropower trade-offs and ways of mitigating them and sharing irrigation benefits with local communities. 3. Select upto 5-8 cases from among the 20 cases for detailed case studies and data collection for further firming up the typologies developed earlier.

2 Chapter II

Methodology of Study

2.1 Literature Review on Trade-off between Hydropower Generation and Irrigation for Food Production

The notion of trade-off between hydropower and irrigation seems making choice between two opposing elements. This means to make choice of a sector that brings more return. This applies more in reservoir system where the manager has the control over water allocation. He/she can make decision of use of that water of reservoir either for hydropower generation or in irrigation for agriculture production (Tilmant et al., 2009). If the manager has to make decision based on the return of per unit of water use, he/she will go for hydropower generation because it brings more return of use of water than in irrigation for crop production.

There are instances where the legal system of a country also suggests the use priority of water. In Nepal, the Water Resources Act, 1992 states the priority use of water like drinking water is first priority, then irrigation, agriculture use and hydropower. In Pakistan, it is irrigation which has first priority of water use. However, scenario will change from reservoir system to run of the river system of hydropower generation. The water flow in the river keeps on changing according to the season. Hence, the water use price per unit also changes. Can there be a trade-off between irrigation and hydropower in run- of- river system? In Nepal context, the flow of water in river systems changes tremendously by season. In run of the river, flow of water becomes abundant for almost 8 months for both irrigation and hydropower. However, the crucial decision about trade- off has to make during lean period like from December to May (for example in Jhimruk Hydropower and Marsyangdi Hydropower Project, Abu Khairane).

The system of inter-basin water transfer for irrigation and hydropower has different characteristics for trade-off analysis of per unit of water use (Bheri- Babai and Jhimruk). Though both of them are of inter-basin water transfer, the characteristics are different. In Bheri-Babai, it is not between hydropower and irrigation, it is rather water use for both purposes. Hence, the trade-off between hydropower and irrigation will be different. In Jhimruk and Khimti, it is between hydropower and irrigation, mostly, during lean period of water flow.

Based on reconnaissance of 20 hydropower stations across Nepal, the trade-off analysis factors differ. They are influenced by policy of water allocation for example Marsyangdi Hydropower at Abu Khairani during lean period. It has defined catchment area for the systems (catchment area for water use for hydropower only like Marsyangdi, Abu Khairani). It is assumed that no other activity upstream of dam and power house within assigned catchment area of 3850 km3 is allowed. Water use practices both for hydropower and irrigation is seen in other system like in Panauti (JVS, 2017) and Rani Jamara and Kulariya System (DOI/RJKIP, 2016). Other systems like Seti, Bijayapur and Task of Kaski

3 have interesting arrangement that DOI takes responsibility in maintaining headworks for Seti Irrigation System as well as the coordination and cooperation among the power producers and irrigation water users. Sunsari Morang Irrigation system and Chatara power house and Trisuli and Devight Hydropower have different story. Khudi Hydropower of Lamjung is only for power generation, no substantial adverse impacts on irrigation systems around the vicinity exist.

Hence, the trade-off analysis per unit of water use differs among different systems. The present study will focus more on how benefits sharing have been the practice both in hydropower and irrigation in Nepal.

Hydropower development often has a large social and ecological footprint on river basins, and adverse socio-environmental impacts are particularly common at the local level. To address such concerns, it is important for national and local governments to develop policies and regulations that promote more equitable benefit-sharing mechanisms with the affected parties, as well as the wider community (ICIMOD/NITI, 2016).

In the past, hydropower projects have primarily focused on national and regional economic priorities, while paying little attention to the adverse impacts on affected local populations (mostly mountain communities) and surrounding mountain environments. This has resulted in the inequitable distribution of hydropower-related benefits and costs, in which the key beneficiaries of hydropower projects are generally located in distant areas, while mostly mountain people are affected by project-induced negative externalities, but do not derive commensurate benefits. Andhi Khola Project is an example where the investors made deliberate effort to make sure the local people are delivered benefit in the form of irrigation.

Hydropower development leads to short-term and long-term changes in the hydrology of project-affected areas and often impinges on local formal and informal water rights. Hydropower projects are required to mitigate or compensate local people for losses related to the reduction of flow in project- affected areas that are either partially or completely dewatered. Jhimruk hydropower is the example of the situation. However, the water-related benefits that are described in this subsection go beyond mitigation and compensation and, as such, can be defined as ‘benefits’.

Several hydropower projects support local farmers in the construction of check dams and irrigation canals. In some cases, support the regular maintenance of these facilities. In most cases, there is unresolved conflict between hydropower projects and local communities’ vis-à-vis irrigation issues. In Kulekhani, Jhimruk and Khimti, farmers have complained of less water for irrigation due to diversion or being in the dewatered zone and low productivity due to the hydropower project (Shrestha et al., 2016).

Irrigation has a very long history in Nepal, with well-established traditional institutions and procedures for the management of the thousands of Farmer Managed Irrigation Systems (FMIS) in the country. Most of the FMIS are in the

4 hills, while Agency Managed Irrigation Systems (AMIS) in the Terai commonly cover tens of thousands of hectares, with thousands of users. Conflicts can be minimized or managed through good governance in Irrigation Water Users Associations (IWUA) and good technical design of systems (Pradhan, 2000).

Only a fraction of the hydropower potential of Nepal is developed, but the few systems that exist have produced significant local social and environmental impacts during construction and operation, creating conflict with people at the dam site and downstream. Competition to use the same water source for mutually exclusive purposes is a localized problem in Nepal, involving conflicts between hydropower, irrigation, drinking water, and industrial use (ARD, 2006).

Three groups of people are affected by hydropower projects: 1. Those in the vicinity of the project whose land is acquired suffer social disruptions during construction and pollution afterward; 2. Downstream communities affected by low dry season flows, flooding, and pollution; and 3. Upstream communities affected by access roads, transmission lines, and forest clearance.

The inter system dispute in irrigation is almost inevitable when more than one systems has to share the same source of limited water (irrigation, hydropower, and other purpose). However, there is tremendous benefit that could be incurred both to irrigation and hydropower if win-win situation can be arranged. The potential benefit of hydropower in Nepal is tremendous (Kamarcharya, 2007).

2.2 Hydropower and Irrigation Development in Nepal

In 2018, the Power Trade Department of Nepal Electricity Authority (NEA) reported that there are 46 hydropower plants in operation and 132 systems are under construction.

The classifications of hydropower plant are as follows: • Plants less than 100 kW (Micro) • Plants from 100 kW to 10 MW (Small) • Plants from 10 MW to 300 MW (Medium) • Plants above 300 MW (Big hydropower)

2.3 Emergence of Competitive use of Water between Hydropower and Irrigation

One of the features that have emerged is the potential disputes in water use. The negotiation between the traditional water users and the new power developers engage in negotiation for water allocation and water distribution among different sectors during different time period.

5 Competitive Use of Water: Competitive use of water and privatization of small- scale hydropower development have put pressure on FMIS. Water source is the same for irrigation, drinking water and hydropower development. Previously, irrigation alone was monopolizing the use of water but it has changed and put pressure on FMIS. Gradually, share of water in irrigation and agriculture sector is changing (Pradhan, 2000). Within 10 years period, 10 new hydropower projects of different capacity have emerged in Mai, Jog Mai and Puwa Khola of Ilam. This is an example, how different water related infrastructure are coming up (see Annex 6)

In Nepal, there are eight different ministries working in water-related issues. These are like Energy, which is responsible for electricity generation and overall power-sector development. The Irrigation is in charge of irrigation development. Urban Development is responsible for urban drinking water supply and water sanitation provision. Agriculture and Cooperatives Ministry is responsible for agricultural crop production. Forest and Soil Conservation, Science, Technology and Environment, Physical Infrastructure and Transport as well as Federal Affairs and Local Development are also to some extent responsible in water resources management.

In general, officials from powerful sectoral ministries (like MoE and MoI) agreed that there is no need to consult with other sectoral ministries or WECS for their development plans as long as there is sufficient water for the proposed activities and that the proposed activities would not affect other types of water use (e.g. agriculture, hydropower and drinking water supply).

Although powerful sectoral ministries have started discussing multi-purpose projects, which combine hydropower production and irrigation, they are skeptical about the need for IWRM. Theoretically, WECS was to review sectoral ministries’ development plans and activities to ensure cross-sectoral coordination and integration between the different ministries. In practice, however, sectoral ministries hardly share their development plans with WECS because they do not see the added value of doing so. Sectoral ministries formulate their development plans and activities for approval by the National Planning Commission to ensure budget allocation by the Ministry of Finance, Water Planning activities are undertaken without any coordination or information sharing with each other. This trend could have adverse impact on trade-off between hydropower and irrigation. This issue of institutional barriers was eloquently captured by one of our informants: “The concept of IWRM was incorporated into NWP and WSS only for the sake of the policy, not for the government agency involved in water resources management” (interview, September 2014). In turn, WECS has been unable to fulfill its mandate of promoting cross-sectoral coordination, as envisioned in the WRS and NWP, partially leading to its own dysfunction. On top of this, WECS has also lacked human resources to fulfill its mandate (Suhardiman et al., 2015).

The irrigation sector cannot generate enough money itself to finance the programme. The collection of water tariffs has a very poor record. Improvement has been envisaged with the target of achieving irrigation service contribution to

6 30 percent of operation and maintenance cost of the irrigation system by 2007, with further improvement in 2017 by increasing the figure to 45 percent, and eventually reaching the figure of 75 percent by 2027. This means that even for operation and maintenance, the irrigation system will not be self sustained, not to mention capital investment. It is here that the necessity to develop hydropower for multipurpose utilization assumes significance. Fortunately, the resource generation capacity of this hydropower sector is satisfactory and if the capital costs are shared between irrigation and power in a multipurpose development, it will not only help address the problem of the irrigation sector but will also maximize the profits from hydropower development. Nepal has a number of projects that can meet this objective, such as Bagmati, Kankai, Rapti Kosi, Sunkosi, Karnali Bheri-Babai, Mahakali, etc. (Karmacharya, 2007).

Despite conflicting use of water at some sites, the availability of additional gravity-fed irrigation facilities by multipurpose use of civil works has been identified as a significant indirect benefit of micro-hydro installations. Small- scale hydropower installations in Nepal are mainly built using, or as part of, traditional irrigation technologies (Altken et al., 1991).

Water resources management is a complex issue involving many different agencies. Water management includes development, as well as conservation, and many more aspects and sectoral interests; hence, management responsibilities overlap and in some cases conflict with each other. Most water management is carried out by agencies that have sectoral mandate such as irrigation, hydropower, drinking water, industrial water supply or environmental protection (WECS, 2005). Such sectoral mandate hampers to establishing a benefit sharing arrangement among these different sectors. This situation is well reflected on many occasions.

Some of the irrigation challenges currently facing Nepal included old infrastructure and low water-use efficiency of existing systems, under-utilisation of canal water, weak participation of water user associations and generally low levels of institutional capacity. Nepal’s relatively long history of irrigated agriculture, these systems have largely (75 percent) remained in the form of farmer-managed irrigation systems. The remainder, or roughly 25 percent of total land under irrigation is under agency-managed irrigation systems.

The location of water storage and the amount of water storage on each basin imply trade-offs for other sectors such as more irrigation-oriented storage close to high agricultural productivity areas in certain basins could mean less storage options for hydropower in the higher elevations of the same basin (WWF, 2016).

In reality, the implementation of the policy inevitably leads to difficult decisions and trade-offs. For example, after the completion of a hydropower project, the local people living in the upstream reaches of a river will not be allowed to irrigate any additional land. Such irrigation system would have decreased amount of water available for the project, leading to the decline of its electricity production and, subsequently, its revenues, thereby harming the project’s financial viability (Thut, 2011).

7 2.4 Priority of Water Uses in Nepal

The Water Resource Act 1992 (2049 BS) determines which uses of water are given priority and in what order. The use of water for drinking and domestic purposes is given first priority. The priority given to the different uses of water is set out in Section 7 of the Water Resource Act 1992 (2049 BS) as follows: 1. Drinking water and domestic use 2. Irrigation 3. Agricultural use such as animal husbandry, fisheries 4. Hydroelectricity 5. Cottage industry (e.g. water mill or grinder), industrial enterprises and mining 6. Navigation 7. Recreational use 8. Other uses

Although there is no explicit right to drinking water provided for in Nepali legislation, such a right can be implied from certain provisions of the Water Resource Act 1992. For example, drinking water and the domestic use of water, is given priority over all other uses of water. This implies that the public does have a right to drinking water, if not in absolute terms, then at least in priority to say someone wishing to use water for irrigation or hydropower.

The Water Resource Act 1992 (2049 BS) provides that the use of water for hydropower shall have priority over the use of water for cottage industries, navigation and recreation but not over the use of water for drinking and domestic use, irrigation or agriculture (WaterAid Nepal, 2005).

HMG has begun disbursing 10 per cent of the royalties it earns from electricity sales to the affected DDC as per the Local self Government Act, 1999, and Regulation. The Hydropower Policy 2001 (2058 BS) contains provision to disburse one percent royalties obtained from the electricity sales to the affected VDC to use for rural electrification. An Ordinance was passed and issued in January 2004 amended some provision of Local Self Governance Regulation relating to revenue sharing. According to the new amendment, the DDC where power house is located shall be entitled to obtain 12 percent of royalty of the electricity sale from the government. Thirty percent of royalty shall be allocated to concerned Development Region in which electricity is produced. By making this provision, HMG has recognized the notion of local right.

It is clear from the trade-offs between the power and water objectives that the current notion of no conflict is not true and trade-offs will change as more Hydropower plants are added to the system. It is hard to generalize the inter- dependencies between the nexus objectives across all development plans as each new storage plant is in a different basin and each basin presents its own trade- offs. Nonetheless, it is seen that meeting power demands for the dry period presents conflicts in monthly reservoir management. Increase in power demands or Environmental Flow Requirements also changes the trade-offs (Dhaubanjar et al., 2017).

8 2.5 Typology of Hydropower and Irrigation Trade-off

Based on literature review and reconnaissance study, typology of irrigation system and hydropower Trade-off is prepared. Water is source of renewable energy in Nepal. There is great demand of energy for domestic and industrial use. Both government sector and Independent Power Producers (IPP) have been encouraged to produce hydropower to meet the need of energy in Nepal as well as some hydropower units with foreign investment are aimed for export to neighboring country. However, there is need of water allocation for irrigation use as well. There are both positive and negative impacts of hydropower unit development in river systems. The broad typology of hydropower – irrigation development can be categorized as follows: Table 2.1: Typology of Hydropower and Irrigation Systems based on Reconnaissance Study No Typology Nature of use Source of water Use Practices Status of benefit 1 Irrigation first and Use of existing Run of the river Power house Attempt is made to hydropower added. infrastructure for constructed by using ensure win- win Phewa, Bijayapur, hydropower by the canal or canal situation to both Tass, Sardi, agreement and water, agreement for irrigation and Jhankari, Panauti negotiation both by sharing water and hydropower by and Chatara NEA and IPP other benefits by negotiations and both NEA and IPP agreements 2 Hydropower- New Construction Bheri Babai Basin Water can be used By design in win- Irrigation together with provision of diversion independently for win situation Bheri-Babi hydropower and Seti system-run of both, one would not Diversion and Seti Irrigation the river hamper other (Pokhara) 3 Hydropower Deliberate design for Basin diversion Can co-exist By design, win win Irrigation hydropower and together, deliberate situation both to Compatibility irrigation, defined planning in design irrigation and Andhi Khola water allocation at the hydropower was Hydropower initial stage ensured 4 Hydropower Proper allocation of Basin transfer Win-loose in disrupting water downstream of from Jhimruk to Jhimruk irrigation dam in Jhimruk was Madi Jhimruk, Pyuthan overlooked. No EIA at Trisuli and Batar that time. Batar Irrigation System system could not get cooperation from NEA Hydropower Not allowed to use Irrigation loose for sharing the desilting pond not NEA infrastructure opportunity infrastructure to allowed to use transport irrigation water. 5 Hydropower 3500 km3 water shade Run of the river Only hydropower at Win-loose situation Disrupting future is allocated to present but there is irrigation Marsyangdi so it potentiality for development claims that all water future irrigation in Marsyangdi (Abu sources within this Marsyangdi corridor Khairani) area belong to Marsyndi hydropower project. 6 Only hydropower Only hydropower Run of the river No irrigation Win-win generation generation Reservoir System Only about 150 ha Khudi, Tanahu High producing irrigation Dam and Dordi hydropower only potentiality. Dordi is in winter only for hydropower

9 2.6 Factors Influencing Hydropower Irrigation Trade-off in the Run of the River Systems

The table above shows that the result of trade off is determined by several factors. However, the policy of the government and guidelines in the design process also influence the trade off between hydropower and irrigation.

1. Water Use Priority: The national law to the greater extent influence on the trade off between hydropower and irrigation. In Nepal, irrigation is in second priority. However, hydropower is taking now lead role. One can see this changing situation how new water related infrastructures are coming up in short period of time in many river systems. 2. Trade of is also determined by the source of water. If the hydropower is in the run of the river, the win win situation can be ensured. The examples of the hydropower systems in the existing irrigation systems show how they can ensure benefit from both parties through negotiations. 3 In some systems, only hydropower becomes possible and irrigation would not added like in Khudi, Dordi Tanahu High Dam. There would not be issue of allocation of water in different sector. 4 The government policy on investment on irrigation and hydropower also determine the trade off between hydropower and irrigation. The return from hydropower is higher than from irrigation but the food security from national security is very important. One might even argue that one will be able to import food by selling power. In simple term, it might be feasible proposition, but it is not easily acceptable proposition from national security perspective. 5 It is found that if allocation of water to both sectors is done at the time of design, hydropower and irrigation can co-exist. Both of them can be in win win situation like in Adhi Khola 6 The organizational set up with integrated approach for hydropower and irrigation will encourage to look at the compatibility of these sectors and can achieve trad off. 7 There is need to have water accounting and inventory of use of water in river systems. River basin organization has to be in place which will help allocation of water for maintaining balance between hydropower and irrigation.

Out of these typologies of hydropower and irrigation benefit sharing, a number of serious factors are now required to take into consideration. They are a) water right issue, b) water allocation principles in the catchment area, c) impact assessment methods for people and place d) benefit sharing between irrigation and hydropower and e) monitoring and evaluation of upstream down stream impact and mitigation measures. In this benefit sharing exercises, the developers, government agencies issuing license for hydropower development, fragmented water resource management agencies play important role.

10 2.7 Key Informants from the Sites and Project Offices were Planned

After identifying the system candidates, meetings were organized with the officials at Kathmandu as well as at the site. Name list and checklist for information collection are given in Annex 1 and 2.

11 2.8 Selection of Candidate Systems for Reconnaissance Study

Based on those typologies, 20 hydropower systems from 13 distrists were selected by taking into consideration of the size, type, age and topography and ownership (see Figure 2.1). The list and general description of those selected systems and interviewed personnel information are given in the Annex 1, 3 and 5 respectively.

Figure 2.1: Visited 20 hydropower systems for erconnaissance study in 13 districts of Nepal

12 Chapter III

Experiences from other Countries including Mekong River Countries

3.1 General Information

Many countries both in Asia and Africa have made efforts for benefit sharing between hydropower and irrigation systems. Social, technical, policy and organizational structure play important role in promoting benefit sharing between irrigation and hydropower.

Mekong river countries have interesting experiences to learn. The Mekong River flows for 4,800 km from Tibet Plateau to south in the mountainous area in China’s Yunnan Province, (21%), Myanmar (3%), Lao People’s Democratic Republic (25%), Thailand (23%), Cambodia (20%), the Vietnam delta (8 %), and into the South China Sea. It has a total catchment area of 795,000 km2. The river basin has been divided into two parts, i.e. Upper Basin in China (where the river is called Lancang) and the Lower Mekong Basin start from Yunnan (China) downstream to South China Sea (see Figure 3.1). The Upper and Lower Basins make up 24 and 76 percent of the total area of the basin respectively. It is currently one of the least modified large rivers and the second most bio-diverse river in the world after the Amazon (Lebel et al., 2007; MRC, 2011; FAO, 2012; Chapman, 2016; JICA and MRC, 2018).

Water flows in the Mekong River are naturally controlled by the seasonal tropical monsoons. The southwest monsoon (May to October) provides the rainy season, and the northeast monsoon (November to March), dry season. Water availability affects people’s livelihoods and the economy. The agricultural sector is especially vulnerable to variations in water availability since as much as 80 percent of the region’s agriculture is rain-fed (Räsänen et al., 2013). However, surface water is abundant with run-off amounting to approximately 3 475 billion m in the rainy Figure 3.1: Mekong River and Mekong River Basin seasons and 7.8 billion m3 in the dry season. The mean annual discharge of the Mekong River into the South

13 China Sea is approximately 13000 m3/sec., ranking it eight in the world basins (FAO, 2012). More than 90 percent of the population lives in the Lower Mekong Basin, which consists of about 70 percent of the entire area (UNEP, 2006).

The national policies of Mekong River Countries have emphasized the need to extend access to electricity for poverty reduction strategies, improve regional energy security, reduce vulnerability to international energy price shocks and generate export earning in countries like Cambodia and Lao PDR. These factors have led to accelerated development of hydropower and large investment in electrical infrastructure in the Lower Mekong Basin. Hydropower development is expanding on the Mekong mainstream and in tributaries and it is likely to intensity in the near future (MRC, 2017).

3.2 Construction of Hydropower Stations in Mekong Basin

Over the past few decades, the Mekong region is rapidly economically developing, and energy to support economic growth is in high demand. The energy demand is projected to increase by 80 percent or more between 2013 and 2035 (ICEM, 2010; Pittock et al. 2016; Blake and Robins, 2016). Current instability of oil and gas prices, concerns about the future of fossil fuel energy, and the availability of private-sector financing are making hydropower more attractive and accelerating its development in the Mekong River Basin (Blake and Robins, 2016; Mapedza et al., 2017).

The potential of hydropower in the MRB is about 53,000 MW which is a combination of 23,000 MW in the Upper Mekong Basin (China) and 30,000 MW in Lower Mekong Basin. The Lower Mekong Basin total power includes 13,000 MW on the Mekong’s mainstream, and the remaining on its tributaries, of which 13,000 MW are in Lao PDR, 2,200 MW Cambodia and 2000 MW in Vietnam (ICEM, 2010; FAO, 2012; Pearse-Smith, 2012b; Pittock et al. 2016; IEA, 2017).

China has completed nine major hydropower dams on the Upper Mekong with a capacity of 15,700 MW and large inter-annual storage. A further 11 projects are under construction with a capacity of 11,800 MW. In addition, there are another 10 projects planned in the upper basin with capacity of approximately 3,800 MW. These developments to hydropower in Upper Mekong could cause significant changes in flow regimes, water quality and sediment transport. Most of these activities have displaced major population in the area (Pearse-Smith, 2012b; Blake and Robins, 2016; MRC, 2017).

In 2001, there were approximately 17 hydropower projects in operation in the Lower Mekong Basin with a capacity of less than 1,400 MW. During the period from 2002 to 2015 there were additional 40 hydropower projects built to provide a generation capacity of 6,442 MW. While some 14 dams with a total capacity around 3,000 MW are planned for commissioning during the period 2016-2020. Another series of 30 dams with a total capacity around 6,653 MW are under planning status with the majority finalizing Feasibility Studies (MRC, 2017). Over the past few years, investors and developers mostly from China, Malaysia, Thailand and Vietnam have submitted proposals for hydropower

14 projects for the Lower Mekong Basin mainstream. Those proposals are among the largest and most significant developments ever considered by Lower Mekong Basin countries in terms of benefits and risks. Where, Thailand and Vietnam have utilized most of their potential tributaries sites for hydropower development. Now, Lao PDR has the largest remaining potential for hydropower and is currently striving to accelerate development. Lao PDR is showing the most ambition towards the development of hydro resources among the countries in the Lower Mekong Basin, with plans to develop 24,000 MW of capacity and to make electricity exports its main source of revenue by 2025 (IEA, 2017; Mapedza et al., 2017).

Hydropower development is expected to modify the hydrology of the Mekong River and many of its tributaries by reducing and delaying wet season flows, and increasing dry season flows. The magnitude of these changes varies by location within the Mekong Basin, and is uncertain because there are differences among hydrological models and dam development scenarios (Hecht and Locombe, 2014). Areas of hydropower production are laden with meaning for actors with diverse interests. For some, particularly for national and local governments envisaging economic development, but also for companies looking for new investment opportunities, they are areas for investment to exploit abundant natural resources and to drag a rural population out of isolation and poverty (Hensengerth, 2017).

3.3 Agriculture Practices in the Mekong Basin

Agriculture is responsible for most of the water abstraction from the Mekong River and its tributaries, while industry and domestic water supply abstractions are minor. About 70 percent of the Makong Basin’s population dependent on agriculture for their livelihoods. Over 15 million hectares of the total cultivated land in the Lower Mekong Basin is used to produce rice (MRC, 2011; FAO, 2012).

The total area equipped for irrigation in the Mekong River Basin is estimated to be around 4.3 million ha., of which Vietnam accounts for 42 percent, Thailand 30 percent, China 12 percent, Cambodia 8 percent, Lao PDR 7 percent and Myanmar 2 percent. Area actually irrigated is estimated at 3.6 million ha. The equipped area irrigated by surface water accounts for 98 percent while groundwater accounts only 2 percent. Where in Lower Mekong Basin, the dry season irrigated area is around 1.2 million ha. which is less than 10 percent of the total agricultural land (15 million ha.) (FAO, 2102). But in rainy season, irrigation could be possible to cover approximately 27 percent of Lower Mekong Basin’s area and consumes an estimated 41.8 billion m³ of freshwater. In contrast, the estimated present water demand for domestic and industrial uses in the Lower Mekong Basin is only about 2.9 billion m³. A recent assessment of irrigation in the Lower Mekong Basin recorded almost 15,000 individual irrigation projects, varying from small to large scale, and from gravity to pump-fed irrigation (MRC, 2010).

15 The irrigation projects can be categories into four main types, which are:

• Large-scale public paddy irrigation systems

• Smaller community-managed (and -built) systems.

• Commercial privately managed systems, producing for local and export markets

• Farm-scale individually managed systems, producing for local markets, often around towns

More than half of irrigation water use takes place in the Mekong Delta1 (26.3 billion m³), followed by Thailand (9.5 billion m³), Lao PDR (3.0 billion m³), Cambodia (2.7 billion m³) and the highlands of Vietnam (0.5 billion m³). The largest irrigation area is in the Vietnam Mekong Delta while most irrigation projects in Thailand are medium and small scale due to limitations in available water storage and rainfall. Many irrigation projects are planned for Lao PDR, but few proposed projects have been identified for Cambodia (MRC, 2010). Lower Mekong countries plan to increase irrigated area from 6.6 million ha in 2010 to 9.7 million ha. in 2030, including an increase in dry season irrigation from 1.2 to 1.8 million ha. The irrigation potential for Lao PDR and Cambodia, who have far less irrigation infrastructure than northeastern Thailand (Hecht and Locombe, 2004).

3.4 Trade-offs between Hydropower and Irrigation Sectors

Hydropower development of the Lower Mekong Basin’s water resources is proceeding at a rapid pace. Hydropower development in Mekong River or its tributaries is expected to modify the hydrology pattern by reducing and delaying wet season flows, and increasing dry season flows. Along the Mekong tributaries, the hydrological effects of hydropower production vary, depending on whether a dam produces energy on-site or is used to divert water to an off-stream location. The magnitude of these changes varies by location within the Mekong Basin. Increased dry season flows downstream of dams will provide more opportunities for irrigation, navigation and hydropower development (Hecht and Locombe, 2014). Thus, the large-scale hydropower development involves countless trade-offs of interests, creating clear winners and losers. The majority of the Lower Mekong Basin’s inhabitants i.e. around sixty million, are involved in agriculture sector which is the most common occupation and primary source of income throughout the Lower Mekong Basin (Pearse-Smith, 2012a).

At present, only 10 percent of the estimated hydroelectric potential in the Lower Mekong Basin has been developed. There is considerable scope to develop hydropower as a way of meeting growing energy demand. So, the meeting energy demand in a sustainable manner is one of the Mekong Region’s greatest challenges. They are planning to implement multi-purpose reservoirs to get maximum benefits which could minimize the transboundary conflict as well.

1 The Mekong Delta is the region in southwestern Vietnam where the Mekong River approaches and empties into the sea through a network of distributaries. It covers over 40,500 km2 of land.

16 Thus, the Mekong River Commission2 has taken an initiation on ‘Sustainable Hydropower Development Strategy’ focuses on advancing regional cooperation for the sustainable planning and management of the growing number of hydropower projects, doing so from a river basin perspective. This includes making effective use of international experience, developing technical knowledge, elaborating regional guidelines and baselines, and sharing examples of good practice with other basin organizations worldwide. These practices help to bring water, energy and agriculture stakeholders together in order to consider trade-offs and shared benefits in sector policies and approaches in Lower Mekong Basin (GIZ, 2014; MRC, 2017).

The sharing of water and benefit between Hydropower and Irrigation seems in a profitable manner. However, it reported adverse impact of the hydropower reservoirs on indigenous people and aquatic life. These events have immense impact on the livelihood of the indigenous people and local people.

Three case studies are illustred from Mekong River Basin on trade-offs between hydropower and irrigation in Annex 4.

2 The Mekong River Commission (MRC) is an important intergovernmental organization, established in 1995 that aims to improve cross border management and sustainable development of the Mekong between Cambodia, Laos, Thailand and Vietnam, with Myanmar and China participating as “dialogue partners”. MRC is working on common specific interest and joint management of shared water resources and sustainable development of the Mekong River Basin with the aim to ensure that the Mekong is developed in the most efficient manner mutually benefiting all member countries and minimizing harmful effects on people and the environment in the Mekong River Basin.

17 Chapter IV

Findings of the Reconnaissance Study

The findings of the reconnaissance study are summarized as follows: a. Interrelation in benefit sharing between hydro and irrigation It is found, on many sites, that good benefit sharing between irrigation and hydropower can be done. Mostly, hydropower projects can complement in improving irrigation infrastructure and introducing new technologies like lift irrigation systems. However, there is need to plan about this before project implementation takes place. (Tanahu High dam is an example which is under construction.) b. Negotiation about water sharing between hydropower and Irrigation On many occasions, negotiations have made the benefit sharing became possible. The examples are of Bijayapur, Dordi, Andhi Khola, and Panauti. c. Catchment area and water right issue While issuing license for hydropower project, catchment area and water quantity for the project is defined. How is that monitored and supervised is not clear? How is the flow of river is regulated? In most of the systems, 10 percent river flow is hardly maintained during dry season. d. Issues in new irrigation development in Marsyangdi river corridor Once the catchment area is assigned for the hydropower project, other activities are not allowed in the catchment area. Even for the new hydropower development in the same catchment area, the prevalent laws do not save the water right of the existing project. There was conflict for construction of Rainastar Irrigation System from Chepe River which is one of the tributaries of Marsyangdi river. Department of Irrigation is planning to develop irrigation in the Marsyangdi corridor where it is estimated to have 20,000 ha terrace land. Will the hydropower companies allow the use of Marsyangdi river water for this irrigation development? One has to see how the water use priority set by Water Resources Act is being implemented between hydropower, irrigation and drinking water supply. e. Sectoral approach on investment decisions It has been sectoral approach in investment. Hydropower people are concerned only for energy generation. However, it is found that irrigation development is usually accompanied by hydropower component as well. There are many examples like RJK irrigation, Fewa, Bijaypur, Seti in Kaski, Sunsari Morang Irrigation System, Bheri Babai River Diver Project with both irrigation and hydropower. However, there is no incentive for the hydropower developers for integrating irrigation system in the project. f. Registration of Hydro and Irrigation, in different agencies Hydropower development by separate agency including government companies and private investors company. Integrated approach in water resources infrastructure development has not taken place as yet. g. Intake and power generation (in between effect) Headwork diverting water for powerhouse through tunnel or different channel makes irrigation water available to the farmlands. Some mitigation

18 programs are implemented. The case of Jhimruk is interesting in this context. Puwa khola of Ilam has also the similar experience. h. Other economic activities in assigned catchment area (like distillery, poultry and others) It is found that there has not been natural flow of 10 percent is not observed so other economic activities between the dam and powerhouse became difficult. In the case of Marsyangdi of Abu Khairani, 10 percent river flow is not maintained so the economic activities around this are is suffering like distillery, poultry and cement factory, etc. i. Water flow and environmental flow of water It is not clear how and who are monitoring the river flow and environmental flow of river. This situation of maintaining will be crucial when many economic activities will have to take place above and below the dams. Enforcement and monitoring agency (licensing agency, monitoring and implementing agency) has to be effective for evaluation and monitoring of the status. j. Integrated Water Resources Management (IWRM) approach, basin approach and water resources inventory, etc. Keeping in view of the situation as developed for development and other water infrastructures, there is now urgent need of basin planning with clear allocation and good analysis of trade-off water use in different sectors. IWRM approach will help for Basin Planning. k. Revenue of hydropower can help maintenance and operation of irrigation systems There seems no system of revenue sharing between hydropower and irrigation. In Pokhara, hydropower generation is made by using irrigation channels constructed by Department of Irrigation but revenue from power generation is not shared with DOI. However, DOI keep on maintaining the diversion weir and channels out of its own resources. DOI now must use the falls in the channel for power generation and use the revenue for irrigation system maintenance. l. Defining impact area and its basis There is need to fix criteria to define impact on downstream area of a hydropower or to downstream irrigation systems. In the case of Jhimruk, 10 VDC is considered impact area of this project. m. Change in land structure On one hand, agricultural lands are being largely converted as urbanization accrues. People are shifting vocations from agriculture to some other income generating activity, as a result, irrigated lands are left barren. Those, into agriculture face manpower shortages. Furthermore, the previously observed enthusiasms in farmers and water user’s group have lost voicing, as the problem cumulates. This has left hydropower projects at an advantage as previously allotted water for irrigation is now diverted completely for hydropower generation. Example: Phewa and Mardi Hydropower.

19 Table 4.1: Summary of Benefit Sharing between Hydropower and Irrigation in the Reconnaissance Sites

Name of the Primary Secondary Multi-purpose Who benefits How benefit is What benefit local Ownership of system Product Product products shared Irrigation people get Irrigation and and hydropower Hydropower Phewa Irrigation Hydropower Irrigation and None Hydro revenue by Electricity and Hydro-NEA Hydropower NEA Irrigation water Irrigation -DOI Irrigation by DOI Bijaypur Irrigation Hydropower Hydro-Irrigation Hydropower Irrigation by Irrigation water and Irrigation by farmers farmers maintenance support (WUA) Hydro revenue by to canal Hydro-Private party private company Task Irrigation Hydropower Benefit from Hydropower Irrigation by DOI None DOI –Irrigation Irrigation Irrigation by private Hydropower-private company party Seti Irrigation Hydropower Irrigation + Hydropower Hydro revenue by Irrigation Hydropower-NEA Hydropower NEA Irrigation-DOI Irrigation by DOI Andhi Khola Hydropower Irrigation Hydro-Irrigation Irrigation and Revenue by BPC Electricity Hydro-company Hydropower Irrigation WUA Irrigation (BPC) Irrigation-WUA Khudi Hydropower None Only Hydropower Hydropower Hydro revenue by Annual cash BPC, Butawal Company contribution for local community Development Marsyangdi, Hydropower None Only Hydropower Hydropower Revenue by NEA Small grant to local NEA Abu Khairani lift irrigation Seti High Hydropower None Only Hydropower Hydropower By NEA (under Social responsibility NEA Dam, Tanahu company Tanahu grant to local people Hydropower Ltd.) during construction Bheri-Babai Irrigation Hydropower Irrigation and Irrigation and DOI Better irrigation DOI Hydropower Hydropower facility Jhimruk Hydropower Support to Primary product- Hydropower BPC Local people provided BPC Irrigation hydro support to irrigation Dordi Hydropower Support to Hydropower Hydropower Private company Local people get Private company Irrigation improvement of irrigation intake

20 Chatara Irrigation Hydropower Irrigation and Difficult to DOI Irrigation Hydro provides Irrigation DOI Hydropower by product Hydropower identify the Hydro-NEA electricity to operate Hydro-NEA beneficiary dredger to desilt irrigation water Puwa Khola Hydropower None Hydro Hydropower NEA Support to local NEA irrigation system Chaurjhari Irrigation Hydropower Irrigation and Irrigation Irrigation DOI Irrigation benefit to DOI Hydropower Hydro-Cooperative local people Cooperative stop working, no electricity Panauti Hydropower Irrigation Irrigation and Irrigation and Hydropower by NEA Irrigation facilities Hydro-NEA System Hydropower Hydropower Irrigation systems provided to local Irrigation by Local by WUAs farming area from WUAs main canal Jhankri Irrigation Hydropower Irrigation and Irrigation and Irrigation by WUA Support to irrigation Irrigation by WUA Hydropower hydropower Hydropower by Hydropower by Cooperative Cooperative company Trisuli Hydropower None Hydropower Hydropower Revenue NEA Could support for NEA irrigation Devighat Hydropower None Hydropower Hydropower Revenue NEA NEA Pharping Hydropower Irrigation and Multiple uses Irrigation, NEA Water sharing among NEA drinking Hydropower different sectors water and Drinking water but no more in operation

21 Chapter V

Detail Case Study of Hydropower Systems

5.1 Seven Schemes for Detail Study

Out of 20 reconnaissance systems, 7 schemes were selected for detail study. They are: 1. Marsyangdi Hydropower Project of 69 MW, basically hydropower at present 2. Andhi Khola Hydropower Project with Irrigation component 3. Jhimruk Hydropower Project, Inter-Basin Water Transfer 4. Bheri-Babai Multipurpose Project, under construction with irrigation and hydropower 5. Chatara Hydropower, plant gets water from Sunsari-Morang irrigation system 6. Puwa Khola Hydropower causing impact downstream irrigation due to water diversion from tunnel. 7. Paunauti Hydropower built to have water supply from the existing irrigation systems.

5.1.1 Marsyangdi Hydropower Project

Historical Context

During the time of construction of Prithivi Highway in 1966, Chinese technical team identified that the possibility of hydropower construction from Marsyangdi River. The feasibility study of the project was carried out with the financial grant assistance of Federal Republic of Germany. Once it is found feasible, the project construction started in 1985/86 with the co-financing of IDA, KFW, SFD and others. Finally, the power house was commissioned in 1989. It is run of the river type power house.

Water Source of Marsyangdi Hydropower

Marsyangdi river is the snowfed river with annual average discharge of 210m3/sec. It has recorded high flood discharge of 3,850 m3/sec. and minimum river discharge is 33 m3/sec. The weir is constructed to have ponding of water before it enters to desilting basin. The catchment for this hydropower is estimated to be 3,850 km2.

Marsyangdi Hydropower has pick generation capacity is 69 MW. In winter (lean period) the power production is only between 29 to 30 MW. The lowest discharge in the river for power generation is around 36 m3. The catchment area for this project is assigned as 3,500 km2. Hence, the water with in this catchment

22 is the water right of Marsyngdi Project. Specially, this issue of water right becomes prominent during dry period of the year. It was reported that there was conflict when Rainastar irrigation system was about to be constructed by the Department of Irrigation. Chepe river is one of the tributaries of Marsyangdi and falls within the catchment area of 3,500 km2. Rainastar is to use 7 m3 water from the river. Later on, the Rainastar irrigation system was constructed.

Close to intake and ponding area of Marsyangdi at Abu Khairani, it is allowed to take water by pump for irrigation for land of local people. This provision of irrigation was made available by the project itself once the dam construction disturbed the existing irrigation system.

New Generation Challenges: During the time the project was constructed, there was no challenge of water use for agriculture from Marsyangdi River. There were not agriculture lands adjoin to the river except those big river terraces which are dependent on local water sources or that of rain water or water is to be lifted to these terrace lands.

Irrigation Department has identified about 20,000 ha potential river terrace (tar) area for irrigation in the Marsyangdi corridor from Middle Marsyangdi to Mungling area. There are Tumlingtar, Rainastar, Bhansartar, Chamlingtar, etc. Previously, there was no technology to have river lift irrigation. Now there is hydropower and lift technology. Based on so-called water right of Marsyangdi Hydropower within catchment area, will it be possible to irrigate those 20,000 ha tar area?

How can there be a balance in maintaining the power production as well as food production opportunities to feed the growing population in Marsyangdi corridor.

Another interesting observation in Marsyangdi Abu Khairani is the environmental flow of water in the river. It is observed that there is no 10percent environmental flow of water in the river at the dam site of the project. This has resulted into adverse impact in the surrounding economic activities like in that of poultry farm, distillery and cement factory. Who is to monitor the environment flow of water in the river system specially during dry period?

5.1.2 Aadhi Khola Hydropower and Irrigation

Historical Context

Aadhi Khola Hydropower (AHP) is a multipurpose hydropower project designed to maintain trade-offs by providing electricity to local residents, selling surplus electricity to the national grid and supplying water for new irrigation. System. AHP was designed to ensure that the local communities were the beneficiaries of this hydropower plant.

It was found that the level between Andhi Khola and Kaligandi was suitable for power generation in around Galyangbhanjyang in early 1980s. Andhi Khola project was found feasible for hydropower generation. While the funding for

23 construction of hydropower was searched, the donors stated that they are not interested to fund such project which will be benefited to urban people somewhere else.

After the comments of the donors, the whole project was redesigned to include irrigation component in the hydropower. Special team of experts were assigned to develop irrigation system which will benefit both by those who own land and those who would not own land at the time of construction. This is a model irrigation project consisting irrigation development, land reform program and poverty alleviation program as well. This is an ideal project which has not been tried elsewhere in Nepal after its successful implementation. The project and Ministry Water Resources signed agreement for implementation and UMN took responsibility for its implementation. Hydropower is owned by Butwal Power Company (BPC), Butwal. Furthermore, the project delineated the impact area and developed land- and water-sharing institutions, which are discussed in detail in the following section.

Water Source of Andhi Khola Project

AHP is located in the lower Galyang village development committee (VDC) of Syangja district. This run-of-the-river project extends from upstream of Galyang village to just below the Andhi Khola–Kali-Gandaki confluence. Although AHP has undergone recent renovation (increasing its capacity from 5.1 to 9.4 MW), it still comes under Nepal’s ‘small’ hydropower classification, which is defined as 1–10 MW. AHP was built by BPC under the aegis of United Mission to Nepal (UMN). The construction began in 1982 and power generation came into commercial operation in July 1991. The 60 m wide and 6 m tall concrete diversion weir (see Figure 5.1) draws water from the Andhi Khola River just north of Galyang village. The diverted water then flows down a 1.3 km tunnel to a 237 m vertical shaft that fuels the electric power station. The diverted water is then returned downstream and discharged into the Kali-Gandaki River.

Figure 5.1: Aadhi Khola hydropower project

24 After two decades of operation, the turbines in the power station needed to be replaced. At this time, BPC decided to rehabilitate and upgrade the existing hydropower project from 5.1 MW to 9.4 MW. AHP was closed for two and a half years for construction. The construction included expanding the underground powerhouse by 8 metres, enlarging the tailrace tunnel and adding an additional 250 metres of penstock pipe. Furthermore, a rubber dam, which is a new technology in Nepal, was implemented at the headgate.

Nepali Rupees (NRs.) 500 million (US$ 4.9 million), while Mega Bank and BPC each invested. According to the distribution head of BPC in the project office, this project serves electricity to 31,000 consumers in the district of Syangja and the neighbouring district of Palpa.

Out of 31,000 consumers, 418 are small enterprises. Similar to the far-reaching rural electrification from AHP, the Andhi Khola Irrigation System (AIS) (see Figure 5.2) also has far-reaching impacts.

Figure 5.2: Main irrigation canal of AIS

The main irrigation canal that supplies water for the AIS was built with the financial and technical support of UMN during the construction of AHP. UMN managed this canal until 1995 when its management was handed over to the newly formed, community-run Andhi Khola Multipurpose Water Users Association (AKWUA). Initially, the total command area was 282 hectares and irrigation water was supplied to villages and households that were both directly and indirectly affected by AHP.

Today, AKWUA is comprised of 13 members (nine males and four females) representing different VDCs and wards. This organization oversees the management of AIS, which supplies water to 850 households and irrigates 330 hectares of land year-round. This irrigation system serves six wards of two VDCs from Syangja district and two wards of Hungi VDC from Palpa district.

25 Agreement for Water allocation for AKWUA

Water allocations between AHP and AIS were negotiated between BPC and AKWUA and a formal agreement was signed in 2004. The agreed flow of water in the irrigation canal varies seasonally between the monsoon and dry season. From June to October the agreed rate of flow is 684 litres per second (lps) and from November to May the agreed rate of flow is 300 lps.

During the month of April, BPC supplies an additional 50 lps of water for maize planting. UMN, in cooperation with local farmers, researched the amount of land each person would require for year-round food security. Based on their study, it was concluded that 0.036 ha. of land per person was needed to grow a year’s worth of food. Households that had more land than this minimal requirement were encouraged to sell 10 per cent of their ‘excess’ land to AKWUA at a minimum rate. This plan allowed AKWUA to acquire 11.2 ha. of land. A total of 71 households purchased land at a nominal price, which could then be paid for in installment.

In 1995, when the agricultural command area was established, 25,000 shares were issued to equitably distribute water. Each person received four shares, with each share equaling 0.0275 lps. There were two ways of earning additional shares. Local people could contribute labour in canal construction or pay for shares. For example, a person could gain one share by contributing five working days in canal construction, could send five workers for one day of canal construction, or buy a share for NRs. 33 (US$ 0.32). Later in 2005, it was determined that four shares per person was no longer enough to meet irrigation demand, especially now that the area had increased from 282 to 330 ha. Beginning in 2005, eight shares per person were distributed and additional shares could still be obtained.

BPC Supporting Irrigation

AKWUA is financially supported by BPC as well as from user fees. At present, farmers pay NRs. 20 (US$ 0.20) per share per month to AKWUA for water. Of the initial 25,000 shares, AKWUA has sold 20,500. BPC also supports AKWUA’s administrative costs. Prior to the upgrade of AHP, BPC paid AKWUA NRs. 250,000 (US$ 2,456 as per 2015 rate) per year. Now with the completion of the AHP upgrade from 5.1 to 9.5 MW, BPC is providing NRs. 400,000 (US$ 3,930) per year as administration support to AKWUA.

Despite this financial support, AIS is in need of extensive maintenance and renovation. The irrigation canal infrastructure is 20 years old. The Government of Nepal, with support from the World Bank, is implementing the Irrigation and Water Resources Management Project (IWRMP) to improve irrigated agriculture productivity and management of selected irrigation schemes and enhance institutional capacity for integrated water resource management. The Andhi Khola Irrigation System was chosen to receive funding from this project and received NRs. 50 million (US$ 491,000) for construction, maintenance and repair of the canal system.

26 Furthermore, AKWUA received NRs. 9.7 million (US$ 95,300) from the Western Region Irrigation Development Division 2 for the maintenance of old canals. Along with AIS, BPC has also provided pumped irrigation for 10 ha of agricultural land near the weir side. Historically, this area was irrigated by the spring however over the time this spring has dried in the dry period. Local farmers in the weir side demanded that they should also be provided water for irrigation and their argument was people who were not affected by the hydropower projects are benefited by the AIS however they are deprived of irrigation. Therefore, after the upgradation of the project, BPC has supplied irrigation through pumped irrigation from the weir of the project. The total electricity consumption for this pumped irrigation for the year 2016/2017 was 8,535 units. The tariff for pumped irrigation is NRs. 3.3 (US$ 0.033) per unit so the total cost of the electricity is NRs. 28,165.83 (US$ 281.65) per annum. This electricity bill is paid by BPC, and all the maintenance and operation cost of the irrigation pump is taken care by BPC.

The demand of irrigation and community development came from people and with the financial, technical and managerial support from UMN, the communities were transformed from food and water deficit communities to food and water abundant communities. There is a water sharing agreement between BPC an AKWUA on amount of water release as per season from the penstock pipe to irrigation canal. Negotiation has evolved over the years on water sharing and institutional support for AKWUA. This made possible to achieve energy and food security at the same time.

5.1.3 Jhimruk Hydropower Project

Historical Context

Mr. Odd Hoftun, an electrical engineer from Norway had been working in Nepal since 1958 under the United Mission to Nepal (UMN), a Nepal based organization formed by 39 churches and mission organizations from 20 different countries to do social and development work in Nepal. From his home country Norway, like Nepal endowed with large hydro power resources, he brought with him a keen awareness of how important the exploitation of her water resources could be for the development and industrialization of Nepal. It was also part of his thinking that the development of this potential as far as possible should be done by indigenous companies. To this effect he took initiative in establishing Nepali companies which could take on planning, building and equipping of water power projects. Those pioneer indigenous companies were Butwal Technical Institute (BTI), Butwal Power Company Pvt. Ltd. (BPC), Butwal Engineering Works (BEW), Himal Hydro & General Construction Company (HH) and Hydro Consult. These companies in today’s context are the established companies in hydropower development sector in Nepal.

After the successful implementation of Tinau (1.05 MW) and Aadhi Khola (5.1 MW), His Majesty Government of Nepal (HMGN) sent an official request to the Norwegian Government to help financing of the Jhimruk Project in March 1987. A feasibility study (FS) made by Nepal Electricity Authority (NEA) together with

27 expatriate technical advisers was completed in July 1987. BPC looked upon Jhimruk as a relevant and suitable project for the continuing training and growth of the Nepali companies in the field of water power engineering and construction. The request from HMGN was therefore strongly supported by BPC as well as UMN (Bakkevig et al., 1996).

After successful implementation of Andhi Khola Project, Jumruk Hydropower Project was selected in Puythan district. The objective of this power house is to have rural electrification in 12 Village Panchyats of Rolpa, Puythan and Arghakhanchi. The project was selected and started implementation. In those days, there was no system of Environmental Assessment system. During the construction and after there were many disputes and conflicts in the project. The Local Administration, Local Political people and BPC had to go through series of agreements and negotiation with the local people and local administration. The Jhimruk hydropower plant is a 12 MW run-of-river plant built and commissioned in 1994. This project is owned and operated by Butwal Power Company (BPC), and is located in the Pyuthan district in the Mid-Western Region of Nepal.

Water Source of Jhimruk

This project benefits from a 205 m net head caused by the water diversion from the Jhimruk river to the Madi River, this is an inter basin water transfer project. The project includes a head gate in the Jhimruk River that diverts water to two settling basins (see Figure 5.3), and it is conveyed at a design discharge of 7.05 m3/sec. to the semi-underground powerhouse through a 1 km long headrace tunnel and a 250 m long penstock. The water is finally discharge in the Madi River. The power plant is connected to the national grid. In addition, the project opens up for electrification of an area with a population of more than one million people by construction of 162 km of rural transmission lines, which is part of the project.

Figure 5.3: Jhimruk hydropower project (photo credit: Rashmi Kiran Shrestha)

28 Historical Context

In May 1988 the Norwegian Government informed Nepal of Norway's willingness to support the Jhimruk Project up to a total cost of US$ 19 million on the condition that the project should be carried out by the UMN, who had indicated that they were agreeable to such an arrangement. In this way a more flexible and smooth implementation would be possible. NORAD wanted to channel the grant through the same organizations as had been used for Andhi Khola, i.e. Norway Himalayan Asia Mission (NHAM), UMN itself, and also to follow more or less the same pattern for the execution of the project. Nepal agreed to this in a latter dated 17 October 1988. All necessary formal agreements were ready by February 1989, and implementation of the Jhimruk Project could start. Planning, field investigations, design and tender documents took most of 1989. Actual work in field started around new-year 1989/90. After NORAD responded favorably to a request from His Majesty's Government of Nepal (HMGN) for funding of the Jhimruk project, BPC was asked to take on the task of implementing the scheme. In fact, NORAD made it a condition that BPC should carry out the project, and that the grant should be channeled through NHAM/UMN. Jhimruk was conceived as a straight-forward hydro power project. This was somewhat unlike earlier projects in which BPC had been involved, where also rural development aspects to a great extent had been present. Finally, in 17 August 1994, Jhimruk Hydropower Project started commercial operation.

Environment and socio economic Issues in the project area

According to Vakkevig et al. (1996), the environmental and socio-economic matters were not taken care of in the original project plans, which BPC took over from NEA. No one took into account the fact that the Jhimruk River irrigated about 150 hectares of agriculture land downstream of the dam site during the dry season (Svalheim, 2015). There was no ecological thinking or environmental guidelines in Nepal in that time, and nobody even bothers about negative environmental consequences. The only thing that seemed to matter was the need for more electricity (Svalheim, 2015).

On the initiative of the Norwegian Water Resources and Energy Administration (NVE), an environmental project study was carried out. This study took place in 1990-91 and possible impacts, especially on water supply, irrigation and fish habitats, were assessed. The assessment pointed out that there is serious impact for 164 ha. of farmland which was intensively utilized, giving three crops per year. Paddy is grown twice a year, pre-monsoon and monsoon, while wheat is grown in winter. As the agriculture land is limited, these productions are for local consumption only. The total diversion of Jhimruk Khola would affect the cultivation of pre-monsoon paddy, as the crop water requirement for paddy is fairly high and the cultivation period falls in the dry period.

There are irrigation canals on both sides of the river, with off takes upstream of the weir and command areas immediately downstream of the weir. In addition, there are many places further downstream where local farmers' cooperatives take water from the river for irrigation. During the monsoon season July to

29 September and the first couple of months afterwards there is more water in the river than the power plant can use and the question of minimum water release in the Jhimruk river does not affect the operation of the power plant. But for the rest of the year the generation is very much dependent on how much water has to remain in the river.

In addition to the irrigation, the study showed that there are 23 villages between the weir and the confluence with Chappe Khola. Only three of these had their drinking water from pipes. The rest had their water supply from flowing streams, of which eleven drew their water from Jhimruk.

Finally, the assessment study also pointed out that the Jhimruk Khola harbours a wide range of local and migratory fishes. The total diversion of the water would have a significant impact on the local fishes and on the spawning and nursery beds of the migratory fishes. The local fishes being only supplementary food for the local people, impact would be minor.

Negotiation on Water Sharing/Release

After the commission of the project, there was a dispute between BPC and the farmers about minimum water release from the dam. Therefore, there were several meetings between BPC and Jhimruk Hydropower Project Affected Farmers Group to address the problem. Finally, on Monday 5 December 1994, nearly after four months of commission, with the negotiation of both parties, decisions on water release were made. According to the meeting minutes, the water release schedule was fixed for spring and winter season. Three water release schedules were fixed for spring and pre-monsoon season: from 15 April to 10 May; from 11 May to 20 June and from 21 June to 21 July. Similarly, for the winter crop, the water release schedule was fixed from 9 December to 11 December for the first command area which includes three villages; from 15 December, water would be released for second command area which includes one village and from Jan 1 to the third command area which includes one village. For winter crop, it was basically wheat crop so it was decided to release from 1 to 3 days as per need of the crop.

Furthermore, the decision is made to release half of the discharge for spring paddy from 15 April to 10 May. Full water will be released from 11 May to 20 June. And, half of the discharge will be released 21 June to 21 July. However, if the farmers need more or less water than decided, the quantity of water release will be adjusted upon mutual negotiation and discussion. According to the meeting minutes, the winter water release is decided for the year 1994-1995 only. For the subsequent winters, it was decided to have meeting between the project and the farmers before the winter crop season.

However, upon the discussion with farmers during the field visit, at the moment this agreement is not abided. The decision of water release was valid for few years only. The prime focus of the project was to produce electricity to meet the rising electricity demand of the country. The schedule of the water release was such that it would not allow the turbine to run for quite a bit of time, especially in

30 the spring. It was a situation where either you choose electricity or irrigation. People in the project area had never seen light in their life, and they believed that light will bring prosperity in their life. Therefore, they compromised and stopped doing spring paddy cultivation which gave the life line for Jhimruk Hydropower project. However, Jhimruk Hydropower project claimed that they have released 10percent of the discharge in the river. In addition, the project also releases extra water for paddy germination. For the spring season, they have been releasing, 1m3 extra water as per decision made immediately after the commission. However, the farmers complained that they do not get enough water for cultivation. There is an occasional tension between two parties and often it has been solved with mutual discussion and negotiations.

Agitations and Jhimruk Downstream Mitigation Program

There were two big incidents in the history of Jhimruk hydropower project where property worth million were ruined due to local agitation. The first incident was in 2000 from Maoist cadre when ransom was denied. The next one was in 2010 for imposing load shedding in affected districts. In the first incident, the agitators vandalized offices however they did not harm the hydropower structures. In the second incidents, there were 15,000 agitators from affected and neighboring districts. They vandalized and set fire to all the office buildings and properties worth millions. The reason for the first attack by the Maoist for denying the ransom does not have any logical base, it is a mere heinous act of rebel group. However, the reason for second incident cannot be ignored although such a violent activity cannot be justified. According to the focus group discussion with the local affected people, they always pointed out that they have compromised their livelihood for Jhimruk Hydropower Project. Therefore, they demanded at least 24/7 electricity supply in their district. However, BPC had to ration the power supply with the instruction from the Nepal Electricity Authority as there was a power shortage in the country. This was not appreciated by the local people therefore the agitation took place in 2010.

After the agitation, all the concerned parties sat together in the leadership of chief district officer of Pyuthan district where the project is located. This meeting decided to have the detail study on Jhimruk Downstream Impact Study. The study pointed out that there are issues which need to be addressed so that conflicts could be minimized in the future. After consultation with the concerned stakeholders on the recommendation of the report, Jhimruk Downstream Mitigation Program (JDMP) was implemented. JDMP program includes: river training works in the jhimruk river; inclusion of one more affected village in the affected list; access to electricity each and every house of affected villages; implementation of social upliftment program in the affected villages and improving irrigation facilities.

It seems like agitations have forced to recognize and address local problems however it could have been avoided had there been proper consultation and communication prior to the project. In addition, people always compared this project with Aadhi Khola hydropower project which was constructed from same financing and consortium of stakeholders such as BPC, UMN and Government of

31 Nepal. In Aadhi Khola, the main thrust was community development along with electricity generation. However, Jhimruk focused solely for electricity generation. This added frustration among the people in the Jhimruk project area. Aadhi Khola project did not face agitation as such because people had a feeling of ownership in this project through different livelihood activities. Therefore, local participation and community ownership is must in implementing hydropower projects.

Trade-off between Hydropower and Irrigation

Jhimruk River was extensively used for irrigation, occasionally used for drinking water and regularly used for livestock, washing and cremation. After the Jhimruk Hydropower Project, water is diverted to the tunnel for power generation, and all the above mentioned uses of Jhimruk river were ceased. Instead, people from the project area were provided electricity, social uplifted programme, river training, pump irrigation and Jhimruk technical center. However, while comparing the trade-off, hydropower project always gives more return in terms of money. The following activities have been implemented in the project affected area as a trade-off of Jhimruk Hydropower Project.

• Electricity: BPC is the only company which has mandate of production, operation and transmission. From Jhimruk Hydropower Project, 23 villages of Pyuthan district, four villages of Argakhachi are electrified which are under BPC. All the affected villages are covered from rural electrification. • River Training Works: Every year, BPC/ Jhimruk hydropower project carries out river training works from 200-300 meter upstream to downstream as suggested by the JDMP study report of 2011. Upto 2016/2017, BPC has spent around NRs. 96.3 million for river training of Jhimruk and Madi river. In addition, around NRs. 20.9 million for irrigation support through Social Upliftment Programme (SUP). From the focus group discussion with the farmers, it is known that river training works from BPC have saved their fields from yearly bank erosion and cutting from flood. • Pump Irrigation: The project is also supporting lift irrigation. There are seven lift irrigation systems supported by the project. The electricity tariff for the lift irrigation is half in compare to the regular household tariff. The farmers do not have to pay installation charge in the initial stage. Lift irrigation has not been effective to irrigate water intensive crop such as paddy and the farmers are unable to irrigate for wheat crop as well. However, this lift irrigation has supported small holder farmers to do vegetable farming. BPC has supported plastic sheets to channel water and save the leakage which has been effective for farmers. • SUP (Social Upliftment Programme): Every year, 2.5 million rupees are provided to Jhimruk Integrated Development Center (JIDCO) for SUP activities. SUP programme includes: irrigation support; skill development; water supply; road support; health awareness and income generation. • Emergency disaster relief support for irrigation: In 2017 July, there was a big flood in the living memory of Jhimruk river, most of the intake canals

32 downstream were destroyed. The estimated renovation cost would be 10 million. However, 0.4 million rupees were provided through JIDCO for immediate temporary maintenance so that the farmers could at least irrigate the paddy in the same year. However, most of the canals are destroyed and still waiting for government, BPC and other support for renovation.

Discussion on Trade-off issues in Jhimruk Hydropower Project

Jhimruk river has been the lifeline of many farmers in the basin, farmers depended on this river for multiple activities, especially irrigation. However, Jhimruk Hydropower Project is also the only hydropower project in the region (Mid- Western Region of Nepal). Yes, farmers were deprived from irrigation and the farm activities and have reduced agriculture production since its construction. However, for the construction of Jhimruk Hydropower Project, the road from Balubang, Dang district to Pyuthan district was constructed in 1993. This road is the lifeline for the all people of Pyuthan and Rolpa district to commute to other parts of the country including the capital. According to the officer at JIDCO, Jhimruk Project has given a lot in terms of community development. The major example is Pyuthan district is self sufficient in poultry. This project through JIDCO initiated several income generating activities and also awareness activities on health and hygiene. In addition, there is no power cut in Pyuthan district.

But, it cannot be ignored that irrigation and agriculture-based livelihood in Jhimruk Hydropower Project has been reduced. However, even in the places especially in the hilly areas, where there is no hydropower project, agricultural activities have reduced over the years due to out migration of youth for foreign employment. However, with more water efficient technology and mechanization of the agricultural activities, Jhimruk river can provide both electricity and agricultural livelihood. It needs proper planning and participation of people from the planning phase of hydropower making. It also demands for integrated approach in managing common resource such as water upon current sectoral approach of only electricity generation.

5.1.4 Bheri-Babai Multipurpose Diversion Project

Historical Context

Babai river is water scarce river. However, agriculture land suffers from irrigation facilities. It was identified sometimes ago that the diversion of Bheri water to Babi can have multiple benefits. It can generate hydropower and irrigation facilities. Detail feasibility study was done by the Nepali experts and detail implementation plan was prepared.

Nature of the Project and its Benefit

The multipurpose project aims to construct 15 m. tall embankment at Chiple of Bheri-Ganga Municipality in Surkhet and divert the water of the Bheri to the

33 Babai through a 12 km. tunnel. The diverted water will generate 48 MW and irrigate 51,000 ha. land in Banke and Bardiya districts.

Irrigation Department and China Oversees Engineering Group Ltd. have signed an agreement to complete the project by 15 March 2019. The project has constructed road, dug the entry point of the tunnel and built the ring point. The project will also operate social and economic activities in the project-affected areas.

Similarly, a diesel plant of 4 MW has been set up and diesel storage with capacity of two lakh litres has been constructed. Graveling of the rural road, electrification for solar irrigation and canal repair work have been completed. The Tunnel Boring Machine (TMB) machine is an advanced type and will be used for the first time in the country. The machine will be used to dig a 12 km. tunnel in Chure hill located between Bheri and Babai rivers. At the time of the study team visit to the site, 3 km. of tunnel has already been dug by TMB.

The project is estimated to cost NRs. 16 billion. It has no foreign investment and is estimated to give NRs. 2.40 billion profit from irrigation and NRs. 2 billion from the 48 MW of power generated in a year.

Bheri Babai Diversion Multipurpose Project (BBDMP) has been classified by the Government of Nepal as "Project of National Pride.” It is aimed to transfer 40 m3/sec. water from Bheri-River to Babai River under a head of about 150m to provide round the year irrigation to 51,000 ha cultivation land in Bardiya and Banke districts. Present mandate of BBDMP is to develop headworks, headrace tunnel and related infrastructures to divert the water from Bheri River to Babai River and also to utilize the head available. A power house on the bank of Babai River will be constructed that will generate power of about 48 MW. BBDMP includes three major components, namely about 12.34 km. long 4.2 m. dia. tunnel, headwork and desanding basin to be constructed in Bheri River end, and third components include fore bay, penstock, powerhouse and electro- mechanical parts of BBDMPP is located in Babai River end. Bheri-Babai can generate consistently 48 MW power generation round the year. The minimum flow of Bheri river is 78 m3. The project requires only 40 m3. Hence, the project will be able to generate consistently round the year revenue. Among the systems studied, this system has the best complementarity between hydropower and irrigation. Round the year and irrigation can be assured by this project. The uninterrupted generation for round the year hydropower generation will be able to bring revenue of NRs. 2.5 billion which can be used for O&M of irrigation systems.

This project has a long time and far reaching consequences about the irrigation development and hydropower generation by the Department of Irrigation. The expected revenue out of power generation will be used for the O&M of Power house as well as the irrigation systems in Nepal.

This project ask for institutional reorganization accommodating the expertize on hydropower management and large scale irrigation system management in

34 Banke and Bardia. This project is an example of complementarity of hydropower and irrigation development. It is not one against other. Both sectors work together and benefit equally.

Institutional Challenges

The lead organization for the implementation of the tunnel construction is Department. The irrigation improvement in Banke and Bardiya will be the responsibility of Department of Irrigation. However, the 48 MW hydropower is to be constructed. It has not yet been decided how the implementation will take place. Is it to be constructed by DOI or NEA? Can DOI sign agreement for PPA? What are the legal implications? Can a section of the government agency sale the product to other agency?

Once the hydropower is constructed, many changes can take place. As stated earlier, the revenue of hydropower generation can bring enough resources to support operation and maintenance of irrigation systems in Nepal. There is no conflict in water share and water use between hydropower and irrigation. However, operation modality has yet to be fixed.

5.1.5 Chatara Hydropower Project at Sunsari-Morang Irrigation System

Historical Context

India government constructed Chatara Canal long time ago. The intake of the canal became problem so redesign of intake was done whereby 5 meter fall in the main canal became possible. Taking the advantage of the fall, 3.2 MW hydropower project was planned and constructed. Accordingly, main canal and power house were designed. After completion of the construction of facilities, it was decided that power house operation will be handed over to NEA and power required for operation of dredger machine to desilting pond will be made available to SMIP free of charge. The operation of dredger machine to improve the quality of irrigation water. Koshi river has high silt so dredging of the water is important to deliver quality water to farmers.

Chatara Irrigation Canal is located in the Administrative Districts of Sunari and Morang, on the left bank of the Koshi River below Chatara gorge (see Figure 5.4). In 1964, an agreement was signed betwee n India and Nepal for the construction of Chatra Canal. India constructed an irrigation scheme on the left bank of the Koshi in Nepal. Water is diverted from the Koshi River at Chatara into the 50 km long Chatara Main Canal (CMC) on its left bank. The CMC flows eastward and commands a net irrigable area of 68,000 ha. The irrigation system includes 17 km of branch canals, 210 km of secondary, and only 105 km of tertiaries. In June 1975, the Government of India handed over the irrigation scheme to the Government of Nepal. The intake and main canal were designed for a discharge capacity of 45.3 m3/sec. for continuous supply over the whole original command area (WB, 1978; JICA, 2003; NPCS, 2012). However, the irrigation canal faced a serious problem of water diversion and sediment deposition in the canal network. Hence from 1978, after 3 years of operation, rehabilitation and

35 modernization work of the scheme has been started. During modernization, the intake has been relocated to increase the water diversion and reduce the sediment entry. Besides, a settling basin with dredgers (see Figure 5.5) for continuous removal of sediment has been provided near the head of the main canal (Paudel, 2010).

Figure 5.4: Intake of Chatara irrigatin system Figure 5.5: Operating dredger in the Chatara canal

The Chatara hydropower station was also constructed by Irrigation Department. During the time of construction of hydropower station, it was not decided who is to operate the station. Later on it was decided that the hydropower station be handed over to NEA for operation and management. For this purpose, an agreement was signed between Department of Irrigation and NEA for handing over the power plant. Some issues arises are illustrated as below:

• NEA has made agreement with irrigation office to supply electricity to operate dredger pumps (extraction of sand/silt from canal) and amount of water to generate the hydropower around 3.2 MW (Agreement is attached in Annex 8) • In the agreement, it is stated that NEA provides 10 percent of electricity generation to irrigation office for operating Dredger pumps. Recently, there is no electricity generation from the Chatara Canal. Due to wear and tear of turbine, there has been disruption of the power supply. The NEA is supplying power to dredger station from the Dharan Sub-station at the time of this study. NEA argues that they supply free power when it is generated from Chatara Power House. Since they have to supply electricity from somewhere else, so DOI has to pay the electricity charge. • NEA has submitted to Irrigation Office to pay NRs. 20 million rupees bill but Irrigation Office wants 10 percent deduction according to agreement, so there is a conflict between NEA and Irrigation Office for paying electricity bill. • Besides the issue of power supply from Chatara for dredger, there are problems in the dredger machines. This hampers to maintain the quality water for irrigation.

36 • Usually, Dredger Machine’s design lifetime is around 9 years. The present machine is operating for more than 22 years with good repair and maintenance. • In 2017, there was big flood which damaged 13,300 ha. agriculture land (cover by sand). These lands do not need water for irrigation at present so water is enough to irrigate remaining land. • During the rainy season, intake of the canal will be closed to protect from the flood / debris (e.g. logs, stones, etc.). During this period, there is no electricity generation from hydropower Station.

Chatara Hydropower Station (CHS), a canal drop type power station, is located at Sunsari-Morang main canal with installed capacity of 3.2 MW and annual design generation of 6 GWh (see Figure 5.6). It was commissioned in 1996 AD at a cost of NRs. 162.6 million. The plant which was originally designed to be a captive plant for powering dredger pumps to flush sediments from the Canal, was later handed over to NEA by Sunsari Morang Irrigation Project (SMIP) on 29 March 1999. The electricity generation of CHS fully depends upon the quantity of water demanded by farmers for irrigation purpose. So the both unit cannot produce electricity throughout the year. However, the power station has not undergone any major overhauling since the plant was brought into operation in 1996. Both units are not in operation from 2014. Now, the power station has started to carry out the overhauling the unit no. 2. After completion of overhauling of unit no. 2, future plans are to start for complete overhauling of unit no. 1.

The Project Manager of CHS says that the station can not generate full capacity 3.2 MW due to faulty canal design. In order to generate 3.2 MW, the canal should have full capacity water but canal is weak so it can not hold full capacity water. After power house, there is no escape so that only limited amount of water can be allowed in the canal making less power generation.

Figure 5.6: Chatara hydropower station

37 Findings from the Field Interview

• Design gross head of the hydropower is 5.38 m which is very difficult to get from this canal. To get this head, we need 110 m water level in the canal which is difficult to get due to the earthen canal structure. • In an average CHS generates around 2-2.5 MW/hr. instead of 3.2 m. • According to NEA-Irrigation Agreement, NEA should provide/supply 10percent of the generated power to operate Dredger pumps. • 1 Mw/hr electricity generation can earn per year: 22 hr. x 1000 KW x 365 days x NRs. 5 per unit = NRs. 4,01,50,000/ year • Electricity consumption by two Dredger pumps in two years: 2 (Dredger no.) x 9.6 hr (40%) x 300 Kw (40%) x 365 day x NRs. 5 = NRs. 1,05,12,000/year. For two years it becomes NRs. 2,10,24,000/-

The issue here is not use of water and which sector brings more benefit. The issue is the complementarity of institutional arrangement to support hydropower and irrigation system. How can that be well done? Factors involved are: 1. Should the Power House be managed by the DOI? Will the situation be different? 2. What organizational changes will have to be made? 3. Design of canal has to be in conformity of the requirement of hydropower for power generation. 4. If agreements are to be negotiated, how that can be done where both parties can be in win-win situation.

5.1.6 Puwa Khola Hydropower Project, Ilam

Puwa Khola Hydropower Station (PKHS), run of river type, located at Golakharka, Ilam having installed capacity of 6.2 MW and annual design generation of 48 GWh (see Figure 5.7). It is located at Golakharka, Ilam and was commissioned in 1999 AD. It was jointly developed by Government of Nepal and NEA at a cost of US$ 15.7 million. It is the only sizable hydropower plant NEA has in the Eastern part of Nepal. The station has two units each with 3.1 MW.

There are around 8 irrigation systems in the upstream of Puwa Khola Hydropower intake. They use around 1 m3/sec. water volume for the irrigation purpose (i.e. 300-400 ha. agricultural land) which does not impact during monsoon season but it effects during dry season. PKHS needs 2.5 m3/sec. water volume to generate 6.2 MW/hr electricity. PKHS has two turbines where one turbine needs 1.25 m3/sec. water volume to generate 3.1 MW/hr electricity. So, eight irrigation systems use water which could run one turbine (i.e. 1 m3/sec.). In a dry season (5 months), PKHS generates around 2-2.5 MW/hr electricity.

38

Figure 5.7: Puwa Khola hydropower intake and hydropower station

• There is no written agreement between Water User Association of Irrigation systems and NEA. • There is only one irrigation system in between 3 km Puwa Khola Tunnel i.e. Lamaduwali. There is one audit close to the Lamaduwali, so spill over water could be used for irrigation (see Figure 5.8). Lamaduwali has their irrigation intake just 2 km below the PK Hydropower Intake (PKHI). During the construction of PKHI, NEA also helped Lamaduwali’s farmer to construct irrigation canal for their agriculture use. • Lamaduwali farmer claim 240 liter/sec. water during dry season but this is not possible for PKHS. If PKHS release this much of water in the river during dry season it is not possible to generate 2-2.5 MWh electricity. However, PKHS release water when there is a maintenance work of power house. PKHS develops schedule for maintenance to inform Lamaduwali farmer. • Lamaduwali uses leakage water and spill over water for irrigation purpose, but during monsoon season there is no problem for irrigation. • Amount of sand/silt in the Puwa Khola is increasing because of construction of new hydropower in the upstream. Many small hydropower projects are under construction in Puwa Khola, Mai Khola in Ilam. • Puwa Khola-I might impact on 8 irrigation systems upstream. • Sometime Puwa Khola-I shot down water flow and discharge water in the Puwa Khola which takes time to reach in PKHS due to the dryness of river. In dry season, it takes around 3 hours and 1 hr in wait season to reach water in PKHS. Three hours delay means 2 MW/hr x 3 hr = 6 MWh which is equivalent to 6 MWh x 1000 kw x NRs. 8.4 (winter price) = NRs. 50,400/-

39

Flushing Tunnel Spillway

Puwa Khola

Figure 5.8: Puwa Khola hydropower’s spillway and flushing tunnel close to Puwa Khola

5.1.7 Panauti Hydropower Project

Historical Context

Panauti Hydropower Station built in 1965 with the assistance of the then USSR, is located at Khopasi, Panauti, 35 km east of Kathmandu. The scheme has an installed capacity of 2.4 MW and annual design generation of 6.97 GWh. The Project was designed for operation of only two units at a time with third unit as a standby. Power canal of 3,721 m long with discharge of 3.2 m3/sec. from headwork to reservoir has seven (7) outlet gates for irrigation in the vicinity of Khopasi and also for drinking purposes as well.

The Panauti Hydro Electricity Project (HEP) was initially developed with duel purpose of hydropower generation and irrigation in the vicinity. This is also verified by the presence of seven gates/openings at different locations on the open headrace canal of the HEP. These gates were constructed in order to provide water for irrigation. In addition to these gates people are increasing the use of the canal water for various purpose ranging from domestic uses like washing clothes, lift irrigation in addition to already provided openings/gates and other animal husbandry related uses. The result of these non-climatic drivers in amalgamation with the changing climate, has resulted in the decrease of the hydropower generation.

Source of Water

The Roshi Khola water is being used by multiple water users including for hydropower and there is increasing pressure on the water (see Figure 5.9). This has also increased the challenges for water allocations. The Roshi Khola water is used for drinking water for adjoining urban and township, irrigation and hydropower.

40

Figure 5.9: Multiuse of channel for supplying water to irrigation and hydropower

Hydropower

Panauti HEP is run of river scheme with peaking poundage system commissioned in 1965 which utilizes the water of the Roshi Khola. The power canal of 3,721 m long with discharge of 3.2 m3/sec. from headwork to reservoir has seven outlet gates for irrigation in the vicinity of Khopasi (NEA, 2015). Since 1975, in a period of four decades, the HEP has already generated 126,510.3 MWh of electricity. The maximum energy was generated in the FY 2001/02 and the minimum was generated in the FY 2011/12. In general, there is a decreasing trend of annual electricity generation.

Similarly, there is potential for additional hydropower generation in the watershed. Department of Electricity Development (DoED) has issued survey license for the following projects in the Roshi watershed. However, the license of 5 MW Dapcha- Roshi HEP was later on cancelled by DoED in June 2014.

Even though the Panauti HEP is quite old and small HEP, it puts forward an important issue that needs to be addressed.

Water Sharing Arrangement:

As the HEP is owned and operated by the government body, the GoN may direct or choose for the shut-down of the power house and provide all water for drinking water or other uses. But had it been the private owned HEP, what would have been the case? Is our legal and policy framework flexible enough to address such issue of multiple water uses? Is the priority order of water-use set out by the Water Resources Act, 1992 applicable where the government have already provisioned license for commercial uses like hydropower much earlier than the realization of need of the same water for drinking or irrigation uses?

41 Similarly, who is to bear the cost of encroachment of such an unregulated water extraction of the headrace canal of HEP through the polythene pines and the ultimate loss of power generation from the HEP?

And who is to be blamed, the HEP or people, who has the right for water use, the traditional user (HEP) or new comers (farmers) as canal water is already provided to farmers in designated areas? The case of Roshi Khola puts forward these questions that need to be addressed prior to the proliferation of the similar cases to other watershed or basins of Nepal.

The priority of water use can best fit in a watershed where no any water resources development works have been carried out. But in the case where the license has been provided by the government for other commercial uses, conflict can arise. Hence there is a need of master-plan for the basin development and optimal use of the resources. This is what the Integrated Water Resources Management (IWRM) deals about.

Benefit Sharing Arrangement

In the lack of any watershed/river-basin organization in the Roshi Khola, there are a multitude of organizations, both formal and informal, who claim to regulate the water use of Roshi Khola. The local bodies, VDCs and Municipalities, claim to have right over the water use within their areas of jurisdiction, whereas the hydropower claims on the basis of obtained license for water use. In addition, the local farmers and ghatta owners also share similar claims.

In such context of contested terrain of water use, the users groups and different institutions share conflicting relations with the local and central government. The lack of authority delegation to the local levels (district) from the central level and lack of coordination among the different line agencies have further aggravated the situation.

42 Chapter VI

Synthesis of Case Study Findings

6.1 Historical Context and Their Types

Nepal had experience of constructing hydropower since 1911 but the program in this sector was slowed until 1980. Out of seven case studies presented here have their beginning in 1980's except Panauti Hydropower which was constructed in 1965. In those days, water related infrastructures were only a few in river systems.

Out of these seven systems under study, four of them are run of the river systems and three of them are the basin transfer systems. Hence the implication of these systems on water sharing, water right, water allocation, down stream impacts are varied. Out of these seven systems, four of them have both hydropower and irrigation components as integral part of the infrastructure development. Other three systems have hydropower generation as the main objective.

The hydropower generation capacity among the case study candidates ranges from 69MW at peak period to 2.5 MW. Hence, power generation impacts are different in different systems.

6.2 Water Source for Hydropower Generation

The water source for these hydropower ranges from major river to tributaries of the big rivers. Marsyangdi project has Marsyangdi river which is a tributary of Narayani. The source of water for Chatara hydropower station is Koshi river. Other systems have tributaries as the source of water.

Along with source of water, some of the systems have been assigned catchment area as the assigned area for secured water supply. In such case, Marsyangdi Hydropower is assigned 3500 km2 catchment area. The same way at the time of issuing license for hydropower construction, catchment area is also mentioned. However, it is not yet clear whether the assignment of catchment area is tenomount to the assured water right within that catchment for particular infrastructure.

With the type of water sources and river, there is no problem of water supply during monsoon period. This situation prevails for almost7-8 months. During dry period, the amount of water availability decreases drastically where competitive use of water increases.

Out of those seven systems under detail study, it is found that the source of water in four systems are used for irrigation and hydropower (Aadhi Khola, Bheri-Babai, Chatara and Panuti).

43 In those three basins transfer system (Aadhi Khola, Jhumruk. and Bheri Babai) conflict in water use between irrigation and hydropower is prominent in Jhumruk. One can note of the intensive negotiations between and among different stakeholder including the project affected people, BPC and local administration. Over period of time, upstream water use for multipurpose has increased in Panauti hydropower because of expansion of command area for irrigation and extra-drinking water projects were implemented for expending urban area of Panauti and Banepa.

6.3 Water Sharing Among the Sectors

Marsyandi and Puwa Khola are hydropower projects so they do not share water with other sectors. However, other systems (Aadhi Khola, Jhimruk, Bheri-Babai, Chatara and Panauti) share water between hydropower and irrigation sector. They are different nature of water sharing. Some of them have formal agreement for water sharing and others have only general understanding. In the case of Andhikola, there is an agreement between hydropower and irrigation for water sharing. The agreement was signed in 2004 stating that for June to October season, irrigation will receive 684 l/sec. of water. The quantity of allocation will change in November-May, it will be 300 l/sec. However extra 50 l/sec. will be made available for maize cultivation in April. In case of Andhi Khola, water share is elaborated by agreement. In case of other systems, elaborated agreements are not concluded. The Jhimruk release 10 percent flow during winter. This is based on mutual understanding between BPC and the stakeholders of irrigation systems. No monitoring mechanism is in place. In the case of Chatara, hydropower is secondary and irrigation is the primary objective. At the location of hydropower station in SMI channel, there is no problem of water sharing. Unfortunately, it is not the allocation of water between irrigation and hydropower but the infrastructure of the main canal has become hurdle for full capacity power generation in Chatara hydropower. The negotiation of water sharing between BPC and affected farmers and working out of schedule for water release in the river is quite elaborate and interesting.

Panauti Power House was built on the existing irrigation systems. Before the power house, several irrigation outlets were provided during the construction of hydropower station. Irrigation channel has been the supplier of water for hydropower. This hydropower project presents interesting development. At the time of power house construction, use of Rosi Khola water was only for irrigation system and hydropower. Now demand on drinking water has also added in the system. This was not the part at initial phase of the construction of the hydropower. In the meantime, Water Resources Act, 1992, came into existence which says drinking water gets first priority right. In the absence of the basin level planning and allocation of water use pattern has changed and power house has became the suffer in water allocation scenario. What extent the traditional water allocation can be changed with the enactment of new water law? This is interesting development in case of Panauti Hydropower.

44 Since Bheri-Babai system does not have competition between hydropower and irrigation after use of water in hydropower, it will go to Babai River for irrigation.

6.4 Water Allocation Policy and Basin Planning

At the time of Marsyangdi construction, 3,500 km2 watershed area was allocated. There was no competitive use of water at that time. The topography was as such that on both sides of Marsangdi, there are only terraces all along. There was no possibility of irrigation to these terraces by Morsyangdi except from tributaries of Marsyangdi. However a conflict was reported which was settled later on. This was about Rainastar irrigation system from Chepe Khola. The Marsyangdi Project argued that Chepe is also the tributary of Marsyangdi within 3,500 km2 so the construction of irrigation channel consuming 7 m3 water will bring adverse impact to hydropower generation. Later on Rainastar irrigation project was allowed for construction.

Along with change and new demands and needs, water use also changes. When there was no hydropower generation, the possibility of terrace irrigation was not possible. Now the number of hydropower units have increased. Power generation has also increased. The Department of Irrigation has identified 20,000 ha. potential terrace irrigation for food production in the Marsyangdi corridor. This is the new potentiality identified. During monsoon, there should not be the problem for lift irrigation in the terrace lands. In winter, power generation will decrease with the use of lift for irrigation. Such new challenges are emerging with the change in the technical potentiality and alternatives.

In case of Andhi Khola, right from the beginning of the project construction water sharing agreements were in place.

In case of Jhimruk the–basin water transfer has caused problem in down stream of Jhimruk river. During the time of the feasibility study, there was no provision of environmental impact assessment in upstream and downstream of the project. In that case, Jhimruk became only hydropower project. When the downstream of Jhimruk felt adverse impact, several negotiations took place between BPC and the stakeholders with the participation of the local administration.

Even if the environmental flow of river water to downstream use is provided by law, there is no mechanism of monitoring of the minimum (10 %) flow of water. In such case, it is only the understanding between the BFC and local people. There is no agency for the water use allocation in the river system. There is no system yet for such allocation

6.5 Basin Organization for IWRM

River Basin Organization (ROB) has not come to existence, Integrated approach in water use has not come into practice as yet. The licensing agency for hydropower is different from the agency providing water right authority to the irrigation or drinking water projects. There has not been inter-sectoral

45 coordination of the water use. There are eight different agenesis in water sector. There is not yet Basin water planning. Puwa Khola, Mai Khola, and Jog Mai of Ilam district have interesting example where, in that short period of 10 years, several hydropower came into existence competing water among power houses and irrigation systems.

6.6 Benefit Sharing Among the Sectors

Marsyangdi does not have to share benefit with other sector. However, there is potentiality for use of Marsyangdi water in other sectors. Andhi Khola has excellent example. Water share between irrigation and hydropower was ensured by agreement. AKWUA receives annually NRs. 400,000 for administrative support. During the time of renovation of hydro power, special arrangement was made for ensuring irrigation water supply.

Bheri-babai is yet to plan about the mechanism of benefit sharing between irrigation and hydropower. The revenue generation from electricity could help improve the O&M of the irrigation systems. Legal, institutional and organizational set up are to be planned to share the benefit between irrigation and hydropower.

The benefit sharing between two sectors are different. Chatara powerhouse is to help provide quality irrigation water to farmers whereas the Panauti powerhouse is to provide more benefit upstream users of irrigation and drinking water.

6.7 Public Hearing System

In all these seven system under study, there was no public hearing system during the time of feasibility and construction. Hence there are often conflicts among these sectors which will appear only at the later period.

6.8 Management of the Sectors

Powerhouses are usually operated and managed by either by NEA or by private companies like BPC. Except in Sunsari Morang irrigation system, other irrigation systems are managed by farmer user communities. Sometimes, the negotiation for water right for the irrigation get second priority as compared to hydropower. Hydropower brings more direct economic benefit as compared to irrigation. This situation is reflected in the organization of the Ministry and WECS and their job performance.

46 Chapter VII

Local Benefit Sharing between Hydropower and Irrigation

In Nepal, prior 1990s, benefit sharing between the sectors and among the local people were not in practice. Physical infrastructure development was the main objective of the program. Around 1990s, specially after the participation of the private sector in hydropower, new generation of activities have started. Local people started putting demand for their need. Inter-sectoral issues are also taken into consideration like benefit sharing between hydropower and irrigation systems.

After the private companies participation in the hydropower development, the concept of Corporate Social Responsibility (CSR) as in other enterprises, took root in Nepal. Corporate Social Responsibility aims at the betterment of different segments of the people. In order to smooth operation of the hydropower, the CSR played important role in benefit sharing and establishing good relation between the company and the community. Out of 20 systems under study for benefit sharing, they are under different management types. 8 of them belong to Nepal Electricity Authority (NEA) having varied experiences of benefit sharing and irrigation and hydropower relation. 4 of them are sharing irrigation water for hydropower generation (Phewa, Seti, Panauti and Chatara). They are inter- related between hydropower and irrigation whereas other 4 systems are only for hydropower generation (Trisuli, Devighat, Marsyangdi and Tanau high Dam). Due to non-cooperation of Trisuli Hydropower, the Batar Irrigation system could not be implemented.

Recently, the projects under NEA also made provision to help the local community through in-built CSR. Under the CRS, along with number of community development activities, some irrigation improvement programs are also intiated. In case of private company managed systems, like that of BPC, attention is given to take into consideration of irrigation component while undertaking hydropower development. Andhi Khola is an example. However, Jhimruk has different experience in relation to irrigation component. There has been direct adverse impact on over 125 ha irrigated land in the downstream of Jhimruk dam. Khudi system in Lamjung is purely hydropower project not affecting existing irrigation systems.

Private sector companies operated hydropower projects give special consideration to the existing irrigation systems. Both irrigation beneficiaries and private entrepreneurs enter into negotiations and come to a satisfactory solution to both irrigation water assurance as well as other benefit activities. Bijaypur, Task, Andhi Khola, Sardi, Dordi, and Jhimruk have provided support to irrigation programs in terms of annual O&M or infrastructure improvement.

As an exercise of local people participation in hydropower projects, local equity investment programs are initiated by several hydropower projects. Innovations are introduced like awarding shares to Water Users Associations of Bijayapur

47 and Seti WUAs. Sardi Project also opened share investment to the local people. In order to ensure and strengthen water institutions like WUA, investment by share to WUA is undertaken.

As the part of agreement with local people, private sector hydropower projects have employed local people in their plants. Hence, it promotes local employment.

Local community infrastructure development programs play important role to bridge relations between the project and local people. Most of these private sector hydropower projects have local infrastructure improvement programs like improvement in the irrigation canals like in Andhi Khola, Sardi, etc. Local road improvement program helps the local to opening the access of agriculture market. In other case, support to school teacher salary was provided.

Skill development activities in vegetable farming, livestock improvement and other income generating activities proved to be quite effective. These activities are prominently supported by these private sector hydropower project. Recently, under CSR of Tanahu high dam, many social improvement activities are underway in the project affected area. They have yet to give consideration for irrigation improvement in the feasible area within project. Details of the local benefit sharing between hydropower and irrigation are given in Annex 7.

48 Chapter VIII

Conflicts in Hydropower and Irrigation Trade off Study

8.1 Conflicts Identification

Conflicts emerge in differing viewpoints and on perception of benefit sharing. Because of conflict situation, the course of action and decision making are also influenced. Conflicts between irrigation and hydropower are often negotiated for settlement. Direct negotiation between the parties specially between the irrigation water users and the private power developers take place to settle the outstanding issues regarding benefit sharing, water allocation, water distribution, etc.

Table 8.1: Conflicts identified in Hydropower-Irrigation Trade off study candidate systems

S.N Hydropower Projects with Project Reasons for Conflicts Conflicts /Basin Ownership 1 Sardi, Gandaki Private Water right/conflict of interest 2 Mardi, Gandaki Private Water allocation/conflict of interest 3 Puwa, Mechi Private/public Water right/water allocation 4 Jhankri, Koshi Public Water right/allocation 5 Jhimruk, Rapti Private Water allocation 6 Khimti, Koshi Private Water allocation 7 Dordi, Gandaki Private Water right and allocation 8 Marsyangdi, Gandaki Public Water right 9 Tanahu High Dam, Gandaki Public Water right 10 Fewa, Gandaki Public Operation and maintenance 11 Seti, Gandaki Public Operation and maintenance 11 Chatara, Koshi Public Ambiguity in agreement 12 Trisuli-Devghat, Gandaki Public Water right 13 Panauti, Bagmati Public Water right

In other situation, government has intervened to settle the conflict like in Jhimruk Hydropower project. The table above briefly describes the nature of conflict among the hydropower systems that have been identified during the reconnaissance visit of these systems.

There are conflicts in private as well as public projects, and the conflicts are mostly related to water right, water allocation and policy ambiguity and lack of communication among the agencies. In the section below, conflicts are classified and analyzed in relation to their causes.

49 8.1.1 Water Right Related Conflicts

Water Resource Act of Nepal 1992 has prioritized use of water resources as : drinking water gets first priority; irrigation gets second priority, agriculture and livestock gets third priority and hydropower gets fourth priority. In this context, it seems that drinking and irrigation water right should always come before hydropower. However, in practice there is no clear policy guidelines to exercise these priorities when hydropower projects are developed before drinking and irrigation projects in the same area. Therefore, when the other sectors (in this case drinking water and irrigation) exercise their right over resource, then there is a conflict between sectors.

8.1.2 Conflict due to Lack of Inter-agency Coordination

1 In Sardi Hydropower project in Pokhara, when it was developed and the agreement was signed to develop hydropower project with electricity development department, there was no mention of drinking water project in the hydropower project area. After the hydropower project was approved, the new drinking water project has started construction from the intake of the proposed hydropower project and it will take water 24/7 days. This will reduce energy production by 1 MW in the lean period (November to May). This has infuriated the project developer whose lean period total generation is 2 MW and it will lose 1 MW due to upstream drinking water project. The approval for the hydropower project and Drinking Water Project are from two different agencies. Both of them are entitled to approve the project. This is an example of multiple agencies in water sector giving approval for the projects. 2 Similarly, the same kind of issue emerged in Puwa hydropower project where the hydropower project was never communicated about the construction of irrigation system upstream of the project which has reduced the energy production nearly by 1 MW in the lean period. This has made the developers to seek the help of the Electricity Development Department. In both these cases, solution could not be found. 3 Other example of the same nature is in Trisuli hydropower project where water vendors are drawing water from different points of the open headrace channel of Trisuli hydropower project. At many times, the project withdrew all the pipes which are installed in the headrace channel by the water vendors and there were disputes between project and local vendors.

8.1.3 Application of New Law in Old Systems and need of Common Platform for Sharing Information

1 Water right conflict could arise in near future if the new Water Resources Act is adhered. One such example is Panauti hydropower- irrigation multipurpose project. It was constructed in 1966 when the

50 Water Resources Act was not even conceived. Due to urbanization and expansion of economic activities, Dhulikhel and Banepa municipalities are demanding that water from Panauti hydropower- irrigation project should be first used for drinking purpose. This will have implication for 150 ha of irrigated areas. Therefore, these examples clearly show that there is lack of synergy among sectors before exercising priority rights over water resource. 2 Similarly examples of Marsyangdi corridor and Tanahu high dam project could induce conflict in the near future. Irrigation Department has planned to irrigate 20,000 ha of river terraces along the Marsyangdi river corridor through lift irrigation. However there are series of hydropower projects already under operation and under construction in this corridor. What will be the implication of this plan to hydropower generation of different hydropower projects? 3 Similarly, in Tanahu high dam, which is under initial phase of construction, there is a possibility of irrigating 300 ha of farmland along the reservoir length of 15 km through lift irrigation. Will this opportunity could be materialized citing the prior right to resources for irrigation upon hydropower? What will be the reaction of Tanahu Hydropower Developer? In addition, irrigation department has already planned for solar lift irrigation in the area. However, both the sectors are unaware of each other’s plan and possibilities.

Need of a common platform for information sharing

It is very clear through these examples, that there is a lack of synergy between and among sectors who are dealing with the same resource and in the same areas. They cause conflict among the projects. In addition, there is no clear policy and guidelines for sectors to adhere with. Prioritizing water resource use has given rights to sectors however it has created conflicts among and between sectors. This priority-based water use right should not cost each other. Therefore, to reduce further conflict, there is a need of platform where all the sectors who deal with water resource, could come together to be informed on each other plans and projects. Basically, these conflicts are to be addressed at basin level organization and there is need of water use planning in every small or big basin of Nepal.

8.1.4 Conflict Related to Water Allocation

1 In the case hydropower, it is provided that there should be atleast 10% water release even during dry period which is called environmental flow. One would notice of non-adherence of the environmental flow in Marsyangdi river from the dam during dry period. This has caused adverse impact in the downstream area industries. There is no strong monitoring of the downstream flow of river water. According to the environment guidelines of Nepal, 10 % of the design discharge of the intake channel should be released for

51 downstream use. In addition, the water resource act says if there are existing irrigation and drinking projects either downstream or upstream, the new water infrastructure should provide water as per need of these existing projects. However, the real case scenario is far from these policy and guidelines. 2 In Jhimruk hydropower project, 150 ha farmland in downstream of the dam could not get irrigation water as the water is diverted to other basin to produce electricity. There is abundant water in monsoon, however, in the lean period (from November to May), there is less water in the river and there is competition over resource use. Hydropower must meet the targeted energy production and in the same time irrigation need certain amount of water release from the weir. 3 If Jhimruk hydropower project releases water as per the need of farmers, then Jhimruk hydropower project cannot produce electricity in the lean period. However Jhimruk hydropower project has not released water as per downstream need and this has led several conflicts in the history of its operation. 4 Similarly, in Khimti hydropower project, prior to the project, Khimti river used to feed seven irrigation canals which used to irrigate 500 ha of river terraces. However after the project, although Khimti claimed to release agreed water for downstream use, farmers are not happy as the released water never get to the irrigation intake canal. Farmers have to work hard every year to raise the water level to the intake canal. 5 In Jhimruk, government have intervened to improve the situation and provide compensation and financial assistance. One of the issues in Jhimruk is the project impact area. It keeps on increasing with every new conflicts. The typical conflict in these systems is the shortage of water at downstream as usual in most of the conflict situation.

8.1.5 Conflict due to Inadequate Water Supply due to Inappropriate Infrastructure

1 In the Mardi hydropower project, the released water is never enough for cultivating paddy and winter crops. Farmers have forcefully increased the intake gate for more water release which has led disputes between farmers and the project. 2 Similar situation may arise in Dordi hydropower project if necessary dialogue and continuous efforts are not made to raise the water by constructing the dam across the river to raise water level to let irrigation water through side intake of Ramchowk phant. The existing irrigation system irrigates 700 ha of Ramchowk phat. The Dordi hydropower project, which is under construction, is in the upstream of this irrigation project. Farmers are already worried about this situation and there has been agreement with farmers irrigation organization that the Dordi project would release that amount of

52 water as planned by irrigation department. However, with the existing practices in projects, it is hard to believe that the project will release water as per agreement. 3 In addition to above cases of water allocation conflict between hydropower and irrigation, the environment flow in river was found low to almost nil during dry period in almost all the hydropower projects visited. People in the dewater zone complained about increased temperature, more mosquitoes and algal boom. The people and livestock suffer from shortage of water. 4 No flow of river water has caused problems for cremation, taking holy bath, washing, bathing and fishing. In a way, the conflicts are accumulating and rising among communities and people in the hydropower project areas. It does not get to the national news unless something like in Jhimruk happened. However, there are conflicts among and between sectors due to unfair water allocation and lack of compliancy in environment flow mechanism.

8.1.6 Conflicts Related to Policy Ambiguity in Management

1 In the hydropower -Irrigation trade off, conflict has emerged between hydropower and irrigation sector due to the policy ambiguity as well In the government hydropower cum irrigation projects such as Chatara hydropower project, hydropower project was constructed by taking advantage of fall in the canal. After the project was completed, it was not clear who is to manage the hydropower station. Since the Morang Sunsari Irrigation Project (SMIP) has high silt load so there is need to dredge the water. It is agreed that hydropower will provide electricity for dredging the canal water. The electricity will be free of cost. Agreement was made between NEA and SMIP. The canal construction was defective so that hydropower station can not generate power as was designed. In course of time, the Chatara hydropower stopped generating power. They have now to bring power from Dharan Sub-station. NEA started to charge electricity charge from SMIS. However, SMIS argues that Chatara Hydropower is handed over to NEA so it is suppose to provide electricity to dredging. NEA argues that the power generated from Chatara would be free of cost for dredging but not from other source. The conflict is not settled yet. 2 In the same time, in Seti and Fewa hydropower cum irrigation projects, although the revenue of electricity is collected by Nepal Electricity Authority, the operation and maintenance of all intake and canals have been taken care by the Irrigation Department. This has also created conflict between these two sectors for a long time.

53 Chapter IX

Conclusion

1. Water is used for the productivity of both irrigation and hydropower. However, the rate of benefit ration of the use of water in these two sectors would be different. It cost around 5,000 liter/kg of paddy production according to FAO. This will bring NRs. 80 after 4 months. If the same amount of water is used for hydropower generation, the revenue from generation will be around Nrs.10/second under the assumption of 100 m gross head and energy cost at NRs. 6 per unit (1 KWh). By this criterion, the return of investment in hydropower is tremendously high as compared to return in irrigation. This shows that the benefit of water use in hydropower is greater. However, food security for a country can not be underestimated.

The regime of water availability in the river systems in Nepal has great variations between the monsoon and lean period. The design of hydropower generation would be for the maximum power generation for longer period of time. It is said that private sector designs the hydropower with 40 percent and NEA designs at 80 percent of water availability. Return on investment would be calculated on the basis of the peak period basis. However, water shortage occurs during lean period for both hydropower and irrigation. During the lean period, it becomes important to make critical decision of allocation of water for hydropower vs.irrigation. Negotiations between the hydropower groups and stakeholders of irrigation play important role. The hydropower would have calculated that during the lean period, hydropower would generate only 20-30 percent of its original capacity. By Environmental Law, it states that at least 10 percent river water flow has to maintain. However, the 10 percent river flow of water to downstream would not be sufficient for agriculture activities. Therefore two parties enter into negotiation for water release schedule. This is the practice being observed in Jhimruk which is basin transfer system. Prior water allocation arrangements have ensured the productivity of both agriculture and hydropower in Andhi Khola Project. In case of the run of the river, the water allocation for irrigation during lean period would be arranged by negotiation like in Sardi Khola, Mardi and Dordi systems.

The two examples suggest that the water sharing problem becomes acute only during dry period. Hence, negotiation with stakeholders and agreement for water allocation for the benefit of both parties would be beneficial to strike a win-win situation.

Nepal has only one reservoir type of hydropower system. This reservoir system is used to supplement power generation during dry period instead of power generation for round the year. This system does not have competitive use of water between hydropower and irrigation. Similarly, Tanahu High Dam is primarily for hydropower generation. There is no major question of trade-off between hydropower and irrigation.

54 2 Maintaining equitable benefit sharing between hydropower and irrigation has to be planned right from the inception of the project. In order to do so, appropriate organizations have to be in place. The extreme case of negligence of irrigation component in Jhimruk has emerged due to negligence of undertaking the environmental assessment of the upstream and down stream impact. Hence, Jhimruk was made to be only hydropower project. Hence the example of Jhimruk teaches us that feasibility study along with environmental impact assessment has to go to- go together.

3 There is need to have organization responsible for river water planning. It can be called River Basin Organization which is to be responsible for water inventory, water accounting, and basin planning so that appropriate candidate systems be promoted with better utilization of water in irrigation and hydropower.

In the absence of such organization, the license for the construction of hydropower based on the study done by the concerned party would be approved. Downstream and upstream impact would be felt only during implementation of the project. This situation also incurs losses and damages to already existing infrastructures like in the proposed Karnali Hydropower project bringing adverse impact to 40,000 ha irrigation project at Karnali.

Recently, many water related infrastructures are coming up in many river systems. None of them have basin or catchment planning. The conflicting situation between and among hydropower and irrigation systems are surfacing. Hence, there is need to establish basin level organization with the responsibility of water inventory, water accounting and planning so that trade-off between irrigation and hydropower can be maintained.

4 Sectoral agencies need to adopt integrated approach. One has to see that it is not the agency as such but the integrated approach is to be taken by the agencies. The orientation to the staff of the agency is important. As of now, the staff of NEA talks only hydropower and nothing else. They can not see and talk about irrigation. It is the approach that will bring balanced treatment between irrigation and hydropower. From the Nepalese experiences the approach of private sector entrepreuners have more of integrated approach between irrigation and hydropower. They have been supporting either new or existing local irrigation systems. The case studies and reconnaissance have shown such trend of sharing benefit between hydropower and irrigation. Private sector projects need to secure support of local people so they make effort to secure the local support of the people providing to them material or monetary benefit. NEA does not feel obligation to the local people. Such example can be drawn from Trisuli Hydropower which refused to allow to use Trisuli Hydropower facility to get irrigation water across Trisuli river for Batar. The Batar Irrigation system became defunct due to the construction of Devighat Hydropower which received water from tail race of Trisuli Hydropower, not allowing to flow water in Trisuli River.

55 Integrated Water Resources Management (IWRM) has to apply wherever it is possible and applicable. This will help increased the productivity of water and conservation of water resources.

The present practice is that Electricity Development Department issues license for the construction of hydropower. Similarly, license to bigger than 500MW would be issued by Nepal Investment Board. License for irrigation system is issued by District Water Resources Committee. There are no interaction among these agencies at the time of license issuing. At the time of construction, they will know the status of water use in that river system. Therefore, there is need of River Basin Organization (RBO), and water inventory, accounting and planning of water use in the river.

5. In Nepal, Nepal Electricity Autority (NEA) is the sole responsible agency for hydropower management. Recently, private sector agencies are also engaged in power production. Usually, power would be sold to NEA through power purchase agreement (PPA).

At present, it is clear that another government agency, Department of Irrigation (DOI) is also engaged in power production. Those Seti, Phewa, Chatara power houses are running from the canals managed by Department of Irrigation. The power generation and management are done by NEA.

Recently, new developments have emerged with the implementation of Bheri-Babai Multi-purpose Diversion Project and Rani, Jamara and Kulariya, Hydropower generation has become reality in these irrigation systems. They are complementary systems. Hydropower and Irrigation go together. There is no conflict in water sharing between hydropower and irrigation in this system. This system can generate consistently the 48 MW hydropower and 40 m3 water for irrigation in Babai river. The revenue generation is expected is to be about NRs. 2.5 billion. It can bring win-win situation to both hydropower and irrigation.

Another important issue is the potential revenue generation from hydropower. The revenue thus generated can be plough back for the O&M of the irrigation systems which were suffering from the lack of resources for uptodate O&M.

The typology made shows that win win situation and win loose situation in the run of the river is determined by the policy of the government. If the government make a decision at the time of feasibility study to allocate water for irrigation as well, this situation will create win win situation. The tendency of monopolization of water only for hydropower would create the win loose situation.

The section of conflict in hydropower –irrigation indicate that conflicts usually occur due to inappropriate allocation of water between these sectors.

56 As of now, NEA is assigned all responsibilities of management of hydropower. However, power production is also allowed to the independent power producers. Similarly, Can separate power generation agency with in the government be allowed to generate power?

If allowed, how the revenue would be shared?

Will the NEA be willing to buy power from Department of Irrigation?

What will be the mode of management of this new power house under DOI?

Will they be able to maintain win win situation between hydropower and irrigation?

57 References

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58 Karmacharya, J. L. (2007). Maximizing Benefits from Hydropower: A Nepal Case, Hydro Nepal: Journal of Water, Energy and Environment, Vol.1. [Downloaded on 14/03/2017, http://www.nepjol.info/index.php/HN/article/view/882/974] Lacombe, G., Douangsavanh, S., Baker, J., Hoanh, C. T., Bartlett, R., M. Jeuland, M., and Phongpachith, C. (2014). Are Hydropower and Irrigation Development Complements or Substitutes? The Example of the Nam Ngum River in the Mekong Basin, Water International, 39(5):, DOI:10.1080/02508060.2014.956205 Lacombe, G., Douangsavanh, S., Thepphavong, B., Hoanh, C. T., Bounvilay, B., Noble, A., Ongkeo, O., Johnston, R., and Phongpachith, C. (2011). Is there enough Water in the Vientiane Plain? A Water Balance Assessment of the Lower Nam Ngum Basin, Project Report Prespared By IWMI for CSIRO – AusAID Research for Development Alliance under the project “Exploring Mekong Region Futures”. Vientiane, Laos: International Water Management Institute (IWMI). Lebel, L., Dore, J. Daniel, R. and Koma, Y. S. (eds.) (2007). Democratizing Water Governance in the Mekong, Unit for Social and Environmental Research, Chiang Mai University, Thailand. Mapedza, E., Suhardiman, D., and Nicol, A. (2017). Structure, Agency, and Challenges for Inclusive Water Governance at Basin Scale: Comparing the Nile with the Mekong, Suhardiman, D. Nicol, A., and Mapedza, E., (eds.) Water Governance and Collective Action: Multi-scale Challenges, Earthscan Water Text Series, IWMI, CGIAR. MRC (2010). State of the Basin Report 2010, Mekong River Commission, Vientiane, Lao PDR. MRC (2011). IWRM-Based Basin Development Strategy 2011-2015, Mekong River Commission, Vientiane, Lao PDR. MRC (2017). Basin-wide Strategy for Sustainable Hydropower Development for the Lower Mekong Basin: An Update for Inclusion in the Basin Development Strategy 2021-2025, Concept Note – Final Draft Version, Mekong River Commission, Vientiane, Lao PDR. Nhan, D. K., Be, N. V., and Trung, N. H. (2007). Water Use and Competition in the Mekong Delta, Vietnam. [Downloaded on 21 June 2018 https://www.researchgate.net/publication/228417279 ] NPCS (2012). Impact Evaluation of Sunsari-Morang Irrigation Project, National Planning Commission Secretariat, M & E Division, SMES 2, Singha Durbar, Kathmandu, Nepal Paudel, K. P. (2010). Role of Sediment in the Design and Management of Irrigation Canals: Sunsari Morang Irrigation Scheme, Nepal. Thesis submitted in fulfillment of the requirements of the Academic Board of Wageningen University, The Netherlands.

59 Pearse-Smith, S. W. D. (2012a). Lower Mekong Basin Hydropower Development and the Trade-off between the Traditional and Modern Sectors: ‘Out with the Old, in with the New’. The Asia-Pacific Journal, Vol. 10(23):1. Pearse-Smith, S. W. D. (2012b). The Impact of Continued Mekong Basin Hydropower Development on Local Livelihoods, The Journal of Sustainable Development, Vol. 7(1): 73-86. Piman, T., Cochrane, T. A., Arias, M. E., and Green, A. (2013). Assessment of Flow Changes from Hydropower Development and Operations in Sekong, Sesan, and Srepok Rivers of the Mekong Basin, Journal of Water Resources Planning and Management, Vol. 139(6). Pittock, J., Dumaresq, D., and Bassi, A. M. (2016). Modeling the Hydropower-Food Nexus and Large River Basins: A Mekong Case Study, Water, 8:425. doi:10.3390/w8100425 Pradhan, P. (2000). Farmer Managed Irrigation Systems in Nepal at the Crossroad, presented in the 8th Biennial Conference of the International Association for the Study of Common Property (IASCP), Bloomington, Indiana Räsänen, T. A., Joffre, O. M., Someth, P., Thanh, C. T., Keskinen, M. and Kummu, M. (2014). Model-Based Assessment of Water, Food, and Energy Trade-offs in a Cascade of Multipurpose Reservoirs: Case Study of the Sesan Tributary of the Mekong River, Journal of Water Resources Planning and Management, American Society of Civil Engineers, Räsänen, T. A., Joffre, O., Someth, P. and Matti, K. (2013). Trade-offs between Hydropower and Irrigation Development and their Cumulative Hydrological Impacts: A Case Study from Sesan River Basin. MK3 Optimising Cascades of Hydropower, Agriculture & Irrigation, ICEM – International Centre for Environmental Management, Hanoi, Vietnam. Shrestha, P., Lord, A., Mukherji, A., Shestha, R. K., Yadav, L., and Rai, N. (2016). Benefit Sharing and Sustainable Hydropower: Lessons from Nepal, ICIMOD Research Report 2016/2. Kathmandu, Nepal Suhardiman, D., Clement, F. and Bharati, L. (2015). Integrated Water Resources Management in Nepal: Key Stakeholders' Perceptions and Lessons Learned, International Journal of Water Resources Development, 31:2, 284- 300. Svalheim, P. (2015). Power for Nepal.Kathmandu, Nepal: Martin Chautari Thut, W. (ed.) (2011). Water and Hydropower in Federal Nepal: Development and Decision Making from a Comparative Perspective, Forum of Federations, Ontario, Canada. Tilmant, A., Goor, Q., and Pinte, D. (2009). Agriculture to Hydropower Water Transfer: Sharing Water and Benefit in Hydropower and Irrigation System in Hydrology and Earth System Science. UNEP (2006). Snidvongs, A. and S-K. Teng. Mekong River, GIWA Regional Assessment 55. University of Kalmar, Kalmar, Sweden. WaterAid Nepal (2005). Water Laws in Nepal: Laws Relating to Drinking Water, Sanitation, Irrigation, Hydropower and Water Pollution, Lalitpur, Nepal.

60 WB (2008). Innovations in Rural Water Supply and Irrigation: Vietnam’s Mekong Delta Water Resources Project, Feature Stories, Issue 20 (Oct. 2008), World Bank. WB (1978). Report and Recommendation of the President of the International Development Association to the Executive Directors on a Proposed Credit to the Kingdom of Nepal for the Sunsari-Morang Irrigation and Drainage Development Stage I Project, The World Bank (For Official Use only) WECS (2005). National Water Plan-Nepal, Water and Energy Commission Secretariat, His Majesty’s Government of Nepal WWF (2016). Nepal-Water Risk Scenarios and Opportunities for Resilient Development, Vol. 1&2, WWF Nepal, Kathmandu, Nepal. Zeng, R., Cai, X., Ringler, C., and Zhu, T. (2017). Hydropower versus Irrigation –an Analysis of Global Patterns, Environmental Research Letters, 12(3). [Downloaded on 19 June 2018: https://doi.org/10.1088/1748- 9326/aa5f3f ]

61 Annexes

Annex 1: Hydropower Installed Capacity

Installed Capacity S. No. Hydropower Remarks in (MW) 1 Fewa 1.0 2 Seti 1.5 3 Bijaypur 4.6 4 Task 0.98 Not enough information 5 Mardi 4.8 No Information available in Internet 6 Andhi Khola 9.4 7 Marsyangdi, Abukhairani 69 8 Tanahu High dam Project 140 9 Khudi 4 10 Dordi, Lamjung 27 11 Chaurjhari 500KW No Information available in Internet 12 Trisuli 21 13 Devighat 14.1 14 Panuti 2.4 15 Khimti-I 60 16 Jhankre Khola 0.63 Not enough information 17 Jhimruk 12 18 Bheri Babai Diversion 48 19 Chatara 3.2 20 Puwa Khola 6.2

63 Annex 2: Checklist for Trade-off between Hydropower and Irrigation

1. History of the systems development- irrigation and hydropower 2. What would be initial objectives of both these infrastructures 3. How does the integrated approach of linking irrigation with hydropower come? 4. Who benefit more? 5. How investments are made. They belong to different agencies? 6. Cost recovery and operation and maintenance of both systems? 7. Are the revenues shared between hydro and irrigation? 8. Ownership of infrastructures 9. Any agreement between hydro and irrigation about the benefit sharing, etc. 10. What are the benefits of irrigation (seasonal, round the year, area covered) 11. Water sharing between hydro and irrigation. 12. Who gets priority? How about during pick agriculture season and during dry period of winter 13. Cropping intensity change 14. Productivity change

Benefit of Hydropower generation

1. Linked with central greed or for local use 2. Creation of local enterprizes 3. Impact on health & children’s education 4. Impact on women work burden 5. Agro-processing mills establishment 6. Storage of food through refrigeration 7. Social and economic changes?

64 Annex 3: Reconnaissance Study of 20 Hydropower Systems

1. Fewa Hydropower

Fewa hydropower station is a canal drop type power station having an installed capacity of 1.0 MW and located at Pardi, Birauta, Pokhara with an annual design generation of 6.5 GWh. It consists of 4 units each 0.25 MW. It was commissioned in 1969 AD and developed jointly by Government of India and Government of Nepal. The public encroachment of power canal leading to power house is a concern for normal operation regardless of the availability of generating units.

Generation from the station was 1.47 GWh in fiscal year 2016/17. Presently, three units are in operation while unit no. 4 is not in operation due to problem in generator-turbine coupling. Some of the works completed in this fiscal year include maintenance of governor, excitation system, high pressure oil system, Installation of trash rack at intake of forebay, repair and maintenance of draft tube of unit no. 1, drain valve and cooling system maintenance, repair and maintenance of generator of unit no 1, replacement of Air Circuit Breaker (ACB) of unit no 1, replacement of 11 kV lightning arrester, drop out fuses and 200-400 A load disconnecting switches, complete wiring change of unit no 1 and 2. Furthermore, civil maintenance works regarding repair and maintenance of forebay gate, repair and maintenance of approximately 300 m power canal, repair and maintenance of power house as well as tail race were carried out.

Salient Features

Hydropower

Type Canal Drop Location Baidam, Pokhara Installed capacity 1.0 MW Annual average energy 6.5 GWh Maximum Net head 74.68 m Total length of the waterways 1.0 km Turbine Number and Type 4, Horizontal Francis Rated speed 1000 rpm Generator Rated output 288 kW Rated voltage 400 V Rated frequency 50 Hz Power transformer 350kVA, 0.4/11kV, 4 Nos.

Irrigation System

• Name of Project : Fewa lake Irrigation System • Command Area : 320 ha. • Object : Lake, Irrigation & Hydropower

65 • Source : Harpan River • Dam : RCC Dam with undersluice • Undersluice : 4 • Undersluice size : 5.70 m x 5.80 m • Area of lake : 5.80 km2 • Capacity of lake : 53000000 m • Construction period : 1978 to 1982 • Designed discharge of canal : 9 m3 • Nuwakote kulo discharge : 1 m3 • Length of canal : 10.69 km. • Capacity hydropower : 1000 KW • Capacity of power canal : 2 m3 • Irrigated land Summer : 320 Ha. Winter : 160 Ha.

Canal details are:

Capacity (Designed) = 1.0 m3 Length = 1000 m. Bed width = 1.3 m. Bed slope = 1:500 (Existing) Parent canal capacity = 9 m3 (Measured 8.7 cumec at the month of Srawan 2048 B.S.) Length up to Power canal Intake gate (Outlet) from the main canal intake 560 m~ (600 m)

Canal Length Discharge 1. Nuwakote kulo 1.5km 1 m3 2. Palpali kulo 0.6 km 3. Sera kulo 0.7 km 4. Power canal 1.0 km 2 m3 5. Mul kulo 2.4 km 6. Ghari kulo 1.2 km 7. Naya kulo 2.6 km 8. Tin kulo 0.6 km 9. Upstream of intake 0.09 km 9 m3 Total 10.69 km

Fewa dam details 1. River bed level = 784.00 m 2. Foundation deepest level = 776.00 m 3. Height of dam above river bed = 12.50 m 4. Maximum height of dam = 20.00 m 5. Spill way crest level of dam = 789.00 m 6. Length of concrete spill way of dam = 27.30 m 7. Length of abutment = 13.50 m 8. Gate height of dam = 5.80 m 9. Total capacity of lake = 5,30,00,000 m3

66 2. Seti Hydropower

Seti Hydropower Station is a run of river plant with installed capacity of 1.5 MW and design generation of 9.8 GWh. It consists of 3 units of 500 kW each. It is located at Nadipur, Pokhara and was put into operation in 1985 AD with assistance from the People’s Republic of China. Power canal of this Plant serves both objectives of irrigation and energy generation. Intake of the canal is regulated primarily for irrigation by Department of Irrigation and hence, normal operation of the Plant sometimes gets affected regardless of availability of units. This plant can generate in full capacity almost all days of the year and all 3 units are in running condition. The annual generation of this station for the FY 2016/17 is 8.045 GWh with decrease of 26.84 percent due to a heavy flood, in Seti River in July last year, severely damaging the headworks.

The maintenance works carried out this year include maintenance of governor and high pressure oil system, repair of governor air oil pressure in unit no. 3, overhauling of unit no. 3, repair of big desander gate and stoplog gate at Jaubari, Inspection of generator stator, rotor and checking of insulation and protective gear, 11kV VCB maintenance work, rewinding of step-up transformer no. 2, rewinding of magnetic amplifier and phase compound transformer of excitation panel of unit no. 2. In civil works, construction of weir section of head works which was damaged by flood last year, temporary diversion works at intake of headworks, relocating desander basin flushing gate to original position, removal of huge deposition of debris, logs and silt during flood at power cannel and protection works in old buildings and civil structures were carried out. The ongoing modification and renovation works of control system and replacement of existing governor with digital governor and SCADA embedded control panel will be initiated in FY 2017/18.

This system was built in 2042 with the grant from Chinese government, and in this time irrigation and power was under same ministry(water resource). The head for the powerhouse is 22.5 m. the hydropower project is of 1.5 MW. It produces 1.5 MW around the year. It generates NRs. 300,000 to 4,00,000 per day as a revenue (note: this number we should not disclose). NEA is responsible for 90 m from forebay to powerhouse. Rest of the structure is the responsibility of the irrigation department.

Seti Hydropower Station is a run of river type with installed capacity of 1.5 MW and design generation of 9.8 GWh consisting of 3 units each 0.5 MW. It is located at Nadipur, Pokhara and was commissioned in 1985 AD with assistance from Government of People’s Republic of China and Government of Nepal. The power canal for this power station is jointly used for irrigation purposes looked after by Department of Irrigation and hence, the operation of this power station is affected by irrigation as well.

The cumulative generation of Seti HPS has reached 254.77 GWh till 2011/12 from its first run. The station has generated 11.62 GWh in FY 2010/11 and 10.41 GWh in FY 2011/12 with decrease of 10.37 percent. The station contributed 0.25 percent of the total energy in the INPS in 2011/12.

67 Salient Features:

Hydropower

Type Run of River Location Nadipur, Pokhara Installed capacity 1.5 MW Annual average energy 9.8 GWh Maximum Net head 22.5 m Total length of the waterways 7.7 km Penstock 1 No., 90 m long, 2.4 m, steel lined Turbine Number and Type 3, Horizontal Francis Rated discharge 2.96 m3/sec. Rated output 543 kW Rated speed 500 rpm Generator Rated output 625 kVA Rated voltage 6.3 kV Rated frequency 50 Hz Power factor 0.8 Power transformer 650 kVA, 6.3/11 kV, 3 Nos. Transmission line 11 kV

Irrigation System

• Name of the project : Pokhara water use and irrigation system • Location : Pokhara Metropolitan City, Kaski • Command Area : 1,030 ha • Source : Seti River • Purpose : Irrigation and power generation • Investment : Government of China • Power Generation : 1500 kw • Project Started : 21 November 1981 • Project Completed : 17 June 1985 • Headworks : Concrete Dam • Minimum river discharge : 6 m3 • Maximum river discharge : 599 m3 • Main Canal : 7.7 km • Branch Canal : 7.463 km • Sub branch canal : 20.278 km • Canal Design Discharge : 11 m3 • Tunnel no : 3 (440 m, 432 m, 683m) • Length of dam : 80 m • Height of dam : 9 m • Irrigated area : Wet season : 1030 ha and winter : 600 ha

68 3. Bijaypur Hydropower

Seti irrigation canal is not only providing irrigation for 1030 ha (now must have been reduced as the development is increasing) but also providing water for TASK hydropower (1 MW), Bijaypur irrigation and also to Bijaypur Hydropower project(4.6 MW). Bijaypur River is also feeding Bijaypur Irrigation system and Bijaypur hydropower. However, the water from seti canal is crucial for both Bijaypur irrigation system and Bijaypur hydropower project.

Bijaypur Irrigation project was completed in 2013 BS with Colombo plan by Indian missionary. The irrigation canals were not built in a scientific way so the irrigation canals were not durable for long time. Therefore, with Asian development bank the canals were renovated and also expanded in 2045. Howev, for eight months, water in the Bijaypur river was too low and it was not enough for irrigation spring paddy and vegetable farming. After the establishment of Bijaypur water users group in 2057, the Bijaypur water users group took initiation to bring the water from Seti irrigation canal at Dui Kulo Ko Muhan through link canal. After successful completion of the link canal, there was enough water for irrigation for spring paddy and other crops. This was the major achievement for the Bijay Irrigation water users group.

In 2065, Task Hydropower Company, built powerhouse in the link canal which feed water to the Bijaypur irrigation system. TASK hydropower system (1 MW) has two turbines each with 500 KW capacity each. Both of these turbines after generating power feed Bijaypur river from the tailrace. The weir of Bijaypur irrigation system starts just below the tailrace of TASK hydropower system. In 2068, Bijaypur hydropower project (4.5 MW) was built downstream of TASK hydropower and Bijaypur irrigation system. Due to Seti link canal and Seti irrigation canals, it was possible for Bijaypur hydro to function as these canals ultimately feed water to the Bijaypur river.

Salient Features:

Irrigation System

• Name of Project : Bijayapur Irrigation System • Location : Lekhnath, Kaski • Command Area : 1,280 ha. • Source : Bijaypur river, from seti river • Headworks : RCC H/W • Minimum discharge : 1 m3 • Main canal length : 4.32 km. • Branch canal length : 10.70 km. • Branch canals : 4 • Canal capacity : 6 m3 • Irrigated land Summer : 1280 ha. Winter : 650 ha.

69 • District/ District headquarter : Kaski/ Pokhara • Zone/ Development region : Gandaki/ Western • Physiographic division : Middle Mountain • Accessibility a. Nearest Airport : Pokhara b. Nearest Roadhead : Site • Marketing Facilities : From Pokhara (05 km)

4. Task Hydropower

Salient Feature

• Developer Task Hydropower (Pvt.) Ltd • Project SETI-II SHP • Development Region Western Development Region • District Kaski, Pokhara city • Water Source Pokhara Irrigation Scheme • Type of Scheme Irrigation Canal Drop (ROC) • Access Road to Head pond 3 km from Kandahar, Pokhara • Discharge of Seti Canal 9.0 m3/sec. • Design Discharge Plant 4.55 m3/sec. • Intake Inlet gate to headpond near cross regulator • Location 2 kulo muhan, Banjhapatan • Forebay Headpond with spillway • Design WL at Forebay 978.2 m • Spillway Canal Existing Irrigation Canal (807 m) • Penstock Type Mild Steel (1.9 m dia) welded buried pipe • Length of Penstock 732m • Powerhouse Compact PH with inclined machine layout • Tailrace Box Culvert with bypass system • Turbine 2 units Francis • Generator 624kVA, 2units Synch AC 0.4 kV • Transformer One 0.4/11 kV, 1275 kVA • Transmission 11kV, 5.3 km. • Interconnection Point NEA 132/11 kV, Khundahar Substion • Installed Capacity 979 kW • Gross Head 28.0 m • Deemed Energy 6.98 GWh • PPA date 08 Aswin 2063 • Construction Started Falgun 2063 • CoD Date 14 Falgun 2065 • Cost of the Project with IDC 19 coror • Loan/Equity Ratio 70:30 • Financing Bank Rastriya Banijya Bank.

70 5. Mardi Hydropower

4.8 MW Mardi hydropower project is a small hydropower project in Mardi river, one of the tributaries of Seti river in Gandaki basin. It is located in Kaski district of Western region in Nepal. This project is developed by Gandaki Hydropower Limited. The project started commercial operation in 22 January 2010. This project produced 27.138 million Kwh in 2015/2016 fiscal year and paid 2.652 million rupees (100 rupees = 1US$) as royalty to the government of Nepal. Mardi hydropower project uses water from Mardi River. From one kilometer from the weir at Saiti Ghatta, this project adds water from Saiti river, the tributary of Mardi river for power generation. Further downstream, the project also takes water from Kuibang Thado Khola before the project. This project is connected to the national grid. This project has benefitted local people with electricity, road, irrigation canals. The affected village council gets NRs. 300,000 (US$ 3,000) every year.

Farmers used water for irrigation from Mardi river, Saiti river and Kuibang Thado khola, which are now diverted to Mardi hydropower project for power generation. Near the weir side, Mardi river used to irrigate 90 ropanies (20 ropani = 1 hectare) of farmland. Similarly, Saiti river used to irrigate 125 ropanies of farmland. In addition from Kuibang Thado khola, farmers used to irrigate 140 ropanies of land. Now, three of these rivers are diverted for power generation. Famers used to harvest three crops: paddy in the monsoon, wheat/mustard/potatoes in the winter, and maize in the spring.

This is Run of the river system for power generation. There were several irrigation systems between the weir and the power house. There was micro hydro in the Saiti river before hydropower project came in. Hydropower company negotiated with local people. Local people handed over micro hydro or water of Saiti river and instead got electricity and compensation. Before hydropower, all of these rivers fed in farmer managed irrigation systems. After hydropower, these rivers are diverted to power generation and the developer has supported farmer for improving irrigation canals. It is not integration of irrigation and hydropower, It is compensating to the loss of one sector irrigation.

In term of monetary value, hydropower is making more money. In term of food security, people have also benefitted. Investment for hydropower is made by hydropower developer. Some of the mitigation work has been done by improving irrigation canals for the farmers. Irrigaton systems belong to farmers group where as the hydropower is owned by the company.

Operation and Maintenance of Both Systems

Hydropower Structures are maintained and operated by hydropower developer (Gandaki hydropower company) and irrigation canals by farmers. However, for using Kuibang Thado khola, the developer has provided NRs. 30,000 for Kuibang community.

71 It is reported that there is no formal agreement between the power company anfd farmers group about water share and maintenance cost.

Actually, farmers are benefitted as the power company has helped improve structure so that they do not have to put on their efforts to improve temporary weirs and also earthen weirs.

The hydropower company has provided several benefits to local people. The company has supported one teacher in the local school. The company has expanded the road which helped women to go to market place to sell their agriculture produce in Pokhara and come back. It has helped to reduce the time for the workload.

6. Andhi Khola Hydropower

Andhi Khola plant is under operation since 1991 with an installed capacity of 5.1 MW. The power plant had 3 pelton turbines of 1.7 MW each. The project was built under the aegis of UMN with old used equipments from Norway. The Andhi Khola Project is a basin transfer project wherein water from Andhi Khola river is drawn from a point not so far from Andhi Khola – Kaligandaki confluence and after generation of power is discharged into Kaligandaki river.

This is a unique multipurpose project in Nepal; water is tapped off before the penstock and is provided for agriculture, which irrigates 309 hectares of land in Tulsi Bhanjyang area of Syangja District and Asardi area of Palpa District.

The residual life of the electro-mechanical equipment of 5.1 MW plant being very short, BPC has upgraded the project to 9.4 MW. Additional water is also available for irrigation increasing the total irrigated area to 599 ha.

The upgradation works started in 2067 and completed construction at the end of 2072. The commercial operation date (COD) has been achieved in 22nd Chaitra 2072. After the upgradation, addition 4.3 MW power and 30 GWh of annual energy generation has been added to the Integrated Nepal Power System (INPS). The power is being evacuated by 132/33 kV substation newly built by NEA at Rangkhola, Syangja. The project was financed by International Financing Corporation (IFC) and Mega Bank Limited, Nepal.

Salient Feature:

Location Galyang, Syangja District, Type Run-of-River Capacity 9.4 MW Head 248.8 M Annual Energy Generation 68.38 GWh Interconnection Point 132 kV Syangja Substation at Rang Khola CoD 2015

72 NEA is carrying out Updated Feasibility study of Andhi Khola Storage Hydroelectric Project (180 MW) which is situated in Syangja district. The existing Siddhartha (Pokhara-Butwal) Highway and Kali Gandaki 'A' access road provide an easy access to the project site. The proposed Dam site of this project has been located just 1.6 km upstream of Kaligandaki and Andhi Khola rivers confluence whereas the proposed Powerhouse site is located 12 km downstream of Kali Gandaki 'A' (KGA) Powerhouse site.

During the present study the crest level of dam has been proposed at 710 masl so that Galyan Bazar on the highway will be protected. A semi surface powerhouse has been proposed on the left bank instead of the underground powerhouse proposed in earlier study. New surge shaft and vertical drop shaft has been proposed to suit the site condition. With the change in project layout, the field investigation works such as Geological drilling, Geological survey mapping, ERT survey, Topo Survey work have been carried out. The EIA study of this project has already been initiated. This study shows that the existing BPC owned Andhi Khola HEP (9.4 MW) project will be inundated by the reservoir after construction. So far, the study shows that this project can generate about 619 GWh of total energy with 8 hour peak in dry season and 3 hour peak in wet season.

Major structures of this storage project comprises of a 185 m high rockfl ll dam, sloping intake, 3.4 km long headrace tunnel, surge shaft, 216 m high dropt shaft, pressure tunnel, semi-surface powerhouse with three turbine-generator units and ancillary facilities. Concrete faced rock dam has also been proposed as an alternative. This project can also be developed as a pumped storage scheme with additional generation of 3 hours in the dry season. Due to easy access for construction, favorable location and minimum environmental impact, this project could be instrumental in augmenting the much needed dry season power/energy demand. Andhi Khola Power Company Ltd. has been established as a subsidiary company of NEA to execute this project. In this fiscal year 2074/075 additional investigation and design work will be carried out. Furthermore, EOI and RFP will be called from International Consultant for detail engineering design and Tender document preparation of this project.

7. Marsyangdi Hydropower

Marsyangdi Hydropower Station is located at Aanbu Khaireni, Tanahun in the central region with installed capacity of 69 MW and annual design generation of 462.5 GWh. It was commissioned in 1989 AD. This year it generated 465.31 GWh of energy, an increment of 5.34 percent compared to previous year's generation. Major works carried out this year are overhauling works of unit no. 2, up gradation of generator protection system & transformer protection system of all three units, replacement of isolators of all the 3 units, replacement of generator cooler of unit no. 2, up gradation of communication system of power house, weir and colony was completed this year. Works like maintenance of radial gate no. 4 & 5, extraction of debris from weir site under sluice canal and maintenance works at Dhakaltar road were also conducted this year. Maintenance of 6 numbers of staff buildings damaged by the earthquake was completed as well as

73 construction of 4 new staff buildings, new boundary wall at staff colony and a new VIP guest house were completed in this scal year. Moreover, Extension of 132 KV GIS bus inside GIS sub-station is still ongoing.

Marsyangdi Hydropower Station is a peaking run-of-river power station with installed capacity of 69 MW with three units of 23 MW each and its annual design generation is 462.5 GWh. It is located at Aanbu Khaireni, Tanahun in the central region about 114 km west of Kathmandu on Prithivi Highway and lies on the right bank of Marsyangdi River. It was commissioned in 1989 AD and developed with the assistance from IDA, KFW, KFED, SFD, ADB and GON at a cost of US$ 22 million. The generation from this power station contributed 10.67 percent of the total energy to the INPS.

Salient Feature:

Type Peaking-run-of-river Location Aanbu Khaireni VDC, Tanahun Installed capacity 69 MW Average annual 462.5 GWh generation Catchment area 3,850 km2 Live storage volume 1.5 million m3 Rated head 90.5m Weir 102m long, Concrete Head race tunnel 7199m, Dia 6.4 m, concrete lined Penstock 75 m long, Dia 5 m, steel lined Turbine Number and Type 3, Vertical Francis Rated Discharge 30.5 m3/sec. Rated output 26 MW Rated speed 300 rpm Generator Rated output 30 MVA Rated voltage 11 kV Rated frequency 50 Hz Power Factor 0.85 Excitation Thyripol Self Excitation Power Transformer 10 MVA, 11/132 kV, 9 (+1 Spare) Single phase 132 kV, Total 108 km (Balaju 83 km + Bharatpur 25 Transmission Line km)

8. Tanahu High Dam Project

Tanahu Hydropower Limited (THL) is a subsidiary company of Nepal Electricity Authority (NEA) established in 2012 to develop 140 MW Tanahu Hydropower Project ("the Project") (formerly, Upper Seti Hydropower Project).

74 The Project site is situated 150 km west of Kathmandu on Seti River near Damauli of Tanahu District in Gandaki Zone.

The Project is the storage type hydropower project with the capacity of 140 MW with an estimated average annual energy generation of 587.7 GWh (Years 1-10) and 489.9 GWh (Year 11 onwards). The Project is situated on Seti river of near Damauli, the district headquarter of . Eight VDCs and Vyas municipality of Tanahun district are directly affected by the project. The estimated cost of the Project is US$ 505 million.

The main components of the Project are 140 m high concrete gravity dam with crest length of 175 m on the Seti River and reservoir with a total surface area of 7.26 km2. The elevation of Full Supply Level (FSL) is 415 m above sea level. The waterway consists of 7.4 m diameter and 1,203 m long headrace tunnel on the right bank for the river. An underground powerhouse measuring 27 m wide x 46 m high x 97 m long will be built approximately 6 km (along the river course) downstream of the dam site. A 190 m long tailrace tunnel will discharge the tail water back into the Seti River. Two permanent and primary access roads (totaling 7.3 km) and several temporary and secondary access roads will provide access to the Project area. Temporary facilities include contractor's camps, equipment and maintenance yard, office areas, project staff's camp area, Construction Power Sub-station, etc.

The project area covers 8 Village Development Committees (VDCs) and Vyas Municipality. The VDCs are (i) Chhang, (ii) Majhkot, (iii) , (iv) , (v) , (vi) Rishing Ranipokhari, (vii) Sabhung Bhagawatipur, and (viii) Kahu Shivapur. The Vyas Municipality, with Damauli Town as district headquarter of Tanahun district, is a major urban settlement. The reservoir will extend about 25 km upstream inundating the low-lying lands (415 m) along the Seti River. The Project will also include Rural Electrification (RE) and Transmission Lines (TL) component. A new 220 kV double circuits TL will evacuate the generated power to the new Bharatpur Substation. The length of the transmission line corridor is 37 km. Additionally, the Project will electrify 18 VDCs through its Rural Electrification (RE) Program.

THL signed the contract agreement with M/S Lahmeyer International in association with Manitoba Hydro. International, Canada (“the Consultant”) as Project Supervision Consultant (PSC) on 29 June 2015. The contract period of PSC is twelve years. The consultant will assist one year for pre-construction activities, six years for project construction and last five years for project operation and maintenance.

Salient Feature:

Reservoir Full Supply Level (FSL) 415.0 m Minimum Operating Level (MOL) 378.0 m Available depth 37.0 m

75 Sedimentation level 320.0 m Gross Storage Capacity 295.1 x 106 m3 Effective Storage Capacity During First 10 years; 192.8 x 106 m3 After 11th years; 181.7 x 106 m3 Dam Type Concrete Gravity Dam Elevation of Dam Crest 420.0 m Height of Dam 140.0 m Length of Dam Crest 175.0 m Volume of Dam 806 x103 m3 Sediment Flushing Facilities Inlet Still Elevation 320.0 m Gradient of Conduit 1:15 m Upstream Maintenance Gate Slide Type Steel Gate Span x Height 5 m x 5 m Intermediate Maintenance Gate High Pressure Slide Gate Span x Height 5 m x 5 m Downstream Auxiliary Gate High Pressure Slide Gate Span x Height 5 m x 5 m Spillway Design flood 7,377 m3/sec. Type Chute Elevation of Overflow Crest EL. 399.0 m Width of Overflow Crest 49.5 m Energy Dissipater Ski Jump Type of Gate Radial Size of Gate 16.5 m span x 16.5 m height Intake Number 1 Type Tower Type Intake Headrace Tunnel Number One Inner Diameter 7.4 m Total Length 1,162 m Penstock Type Tunnel Number One Inner Diameter 7.4 m to 3.1 m Total Length 175 m Draft Tunnel

76 Length 85.8 m Tailrace Tunnel Diameter 7.4 m Length 117 m Power House Type Underground Size 27 m wide x 46 m high x 97 m long Turbine Type Vertical Shaft, Francis Turbine Number Two Rated Output 71,800 kW Generator Type Three Phase, Synchronous Generator Number Two Rated Output 74,700 kVA per unit Revolving Speed 300 RPM Frequency 50 Hz Voltage 13.2 kV Power Factor 0.85 lag

9. Khudi Hydropower

Khudi Hydropower Limited (KHL) owns and operates the 4 MW run-of-river type Khudi Power Plant, which began its commercial operation in FY 2063-64. BPC is the major shareholder of KHL. Other shareholders are Lamjung Electricity Development Company Limited (LEDCO) and SCP Hydro International Inc., Canada. Power generated from the plant is supplied to the national grid (INPS) in accordance with the PPA signed with NEA.

The overall performance of the company has improved this year. Operation has focused on timely repair/maintenance, river training work, proper flood monitoring during the monsoon season and cost minimization.

The company recorded revenue of NRs. 80.9 million this fiscal year in compared to NRs. 100.6 million in the FY 2071-72. The principal and interest for the consortium loan have been paid regularly as scheduled. The company was able to record a net profit of NRs. 17 million in comparison of NRs. 23 million last year.

The royalty for installed capacity and the generation royalty have been paid regularly to DoED as per the Electricity Act 2049. Major portion of the royalty paid by KHL will go towards the rural development

77 The water of Khudi River contains a huge quantity of sediment during monsoon period. This high silt content during monsoon season is the major cause for severe erosion of turbine parts. This has enforced to shut down the plant during flood as the river water is turbid with high sediment content. The erosion of turbine parts also reduces turbine efficiency and increases maintenance duration and cost. As a preventive measure, the power plant has been shut-down mostly during the high floods since the water is very turbid with high sediment content during these times.

Khudi Hydropower Project’s biggest contribution goes towards the people of Lamjung where loadshedding has been drastically reduced compared to the rest of the country. The electricity supply from Khudi HP is consumed primarily in the surrounding areas of Khudi, Besisahar, Dumre and Bandipur. The quality of electricity supply in Lamjung and Tanahu district has substantially improved after commissioning of Khudi Hydropower Project.

A great care has been given to share the benefits of the project with the local community. Various mitigation activities have continuously been carried out to enhance the community relations and protect public interests. KHL has been directly involved in supporting various programs related to health, education, technical training, village development, etc.

Salient Feature:

Project type: Run-of- River (RoR) type

Project Location: Head Work site - Lamjung district, Ghanapokhara VDC, located on the left bank of Khudi River. Power House site- Lamjung district, Simpani VDC, located on the right bank of Khudi River.

Installed Capacity: 4.00 MW Annual energy generation: 24,284 MWh Design discharge: 4.9 m3/sec. Gross Head: 103 m

Intake and Penstock: A side intake, just upstream of the diversion weir placed across the river, diverts the flow into the approach canal which conveys the flow from intake to settling basin. From the settling basin, the flow enters into the 2471 m long headrace pressurized pipe.

Power Evacuation: The generated power is evacuated through 14 km long 33 kV transmission line and is connected to the Integrated Nepal Power System (INPS) at Udipur Sub-Station of NEA.

Access to site: The power house site can be reached within 5 hours drive from Kathmandu and is 9 km away from Besisahar, the District Head Quarter of Lumjung District. Headworks Site is further 2.5 km away from Power house.

78 10. Dordi Hydropower

Dordi Khola Hydropower is a Run-of-River type hydroelectric project with generating capacity of 27 MW. The project is being developed by Himalayan Power Partner Ltd. (HPPL) Kathmandu, Nepal. HPPL is promoted by IME Group and later joined by NRN Investment Ltd. to develop Dordi Khola HPP with equity sharing in 49:51 ratios. This is the first corporate investment of Non Resident Nepalese (NRN) in Nepal.

Feasibility Study of the Project was completed in March 2010. Detail Project Report (DPR) is prepared by international consultant Entura Hydro Tasmania.

The Power Purchase Agreement (PPA) between the company and Nepal Electricity Authority (NEA) was concluded for the period of 34 years (including 4 years for construction) on 15 June 2012 @ NRs. 8.40/kWh for dry energy and NRs. 4.80/ kWh for wet energy and will be escalated @ 3 percent (compound) for nine years.

Location:

The whole project area lies in Chiti, Dhodeni and Bansar VDCs in Lamjung district in western Nepal. It is connected from Kathmandu by 170 km all weather metallic roads up to Udipur at Dumre-Beshisahar Road. A fair weather road from Udipur to Hile passes near by the headworks site (12 km).

Salient Feature:

Gross Head: : 212.0 m Design Discharge : 15.28 m3/sec. Installed Capacity : 27.0 MW (3 x 9 MW) Total Annual Energy : 148.249 GWh Contract Energy : 142.319 GWh Water Ways Closed Conduit/Steel pipe (ø2.65m) : 3237 m Headrace Tunnel (ø3.3m) : 2662 m Penstock Pipe (ø2.3m) : 700 m Powerhouse Type : Surface Tailrace Channel : RCC Box 270 m

11. Chaurjhari Hydropower Project

Chaurjhari Irrigation System construction started in 1970 and completed by 1975. As the part of irrigation system, hydropower system with a capacity of 150 kw was constructed from the canal water and started supplying electricity from1988. The objective of irrigation scheme was to provide year-round irrigation to about 600 ha farmlands spread over the entire Bijeshwari VDC of Rukum. Hydropower (150 KW) provided domestic light to 650 HHs of district headquarter of Jajarkot and adjoinimg villages of Chaurjahari i.e.; Mankot and Kotjhari

79 Historical Context

The present chairperson of WUA (who was also active member and local leader of panchayat regime of that time) is of the opinion that the hydropower scheme was developed with concept of using the revenue generated by hydropower in canal maintenance, however this was not materialized once the power plant became operational.

The ownership of hydropower belonged to Small Electricity Program and the authority contracted out the operation of power plant to local contractor. The revenue from electricity was never utilized for the repair and maintenance of canal (except the replacement of two small aqueducts)

Who benefit more?

The irrigation was the first priority. The farmers having farmland were benefited. They got benefit of house light service as well as irrigation.

Employment generated from hydropower was:

1. Meter reader 2. Dhalpa: taking care of canal upstream of power house 3. Office staff 4. Technicians

Investment in Infrastructure Development

The both Hydropower and irrigation were developed by separate agencies. Irrigation scheme was constructed by Department of irrigation. Small Hydropower Development Project linking with canal with existing irrigation channel was constructed by the hydropower project.

1 Cost recovery and operation and maintenance of both systems? Irrigation scheme: operated under the concept of agency managed irrigation system with participation of farmers. Annual O&M budget was allocated to scheme by the GON through DOI.

The hydropower is defunct since last five year. The operation and maintenance of the power plant was the responsibility of contractor till it was operational. The O&M was contracted out for 10 year @ 165 thousand annually. The contractor used to collect tariff from user and pay to technician, Dhalpa, office staff, etc.

There was no formal arrangement to share the revenue between hydropower and irrigation. However, it was found that two aqueducts were constructed by electricity authority, There was no formal cost sharing mechanism existed. The 4 Dhalpas were also responsible to maintain the canal up to power house.

80 The ownership of infrastructures belongs to different agencies. Irrigation- system is with Department of Irrigation. The small-hydro power program belongs to NEA.

Almost year-round irrigation service was provided. The total command area is about 600 ha.

2 Water sharing between hydro and irrigation is not a problem. There is enough water at source river and was no need of sharing arrangement for almost for 9 month. Tail-race water utilized for irrigation. The water released from the tailrace was used for irrigation. During the lean period (January to March about 2-3 month), the power plant would be closed and water is provided for irrigation purpose to the farms located upstream of hydropower plant.

3 Cropping intensity change: Cropping intensity changed from 100-125 percent to 200-250 percent. Millet, pulse and highland paddy were grown before irrigation. They are now totally replaced by monsoon paddy (almost 100%), wheat in winter together with mustered as mixed crop (above 80%). pulse and vegetable (20%) and vegetable seed production. Spring crops of maize and vegetable are grown in around 50percent area

Power is not linked to central grid as the power plant runs only for limited time (around 2 hour in the morning and evening). The initial stage, when the canal was in good condition, the power plant was operated even at night time for many hour. Later on, the canal got silted and conveyance capacity of the scheme got reduced. The power production also got reduced. Apparently, it is clear that the contractor did not put effort to bring the electricity generation capacity to the original generating capacity of 150 kw.

Now, Chaurjhari is connected by central grid so the small hydropower is not used.

12. Trisuli Hydropower

Trishuli Hydropower Station is constructed on the banks of Trishuli River at Trishuli Bazar, Nuwakot. It was commissioned in 1967 AD in assistance with the Government of India at a cost of INR 140 million with its initial installed capacity of 21 MW having 7 units of 3 MW each. It was later rehabilitated in 1995 AD and upgraded to 24 MW with 6 units each 3.5 MW and one unit 3 MW. It is a peaking run-of-river plant with peaking capacity of 21 MW. The annual design generation is 163 GWh where as its actual generation of this year is 125.97 GWh, a 0.75percent increase as compared to previous year. Cumulative generation from its first run is 5,061 GWh. The major activities accomplished this fiscal year 2016/17 were repair of butterfly and by pass valve of Unit no 3, which was not working properly for years, is now in satisfactory operation after repair. Repair and maintenance of butterfly and bypass valve of unit no 4 and 7 were also done this year. Parallel bearing oil cooler was installed in Unit no 7. MIV of unit no 1

81 and 2 (currently not in satisfactory condition) shall be repaired and put into operation in next year by devising similar method used for unit 3. New overhead crane was installed at head gate. New Line relay and control Panel was installed for 66 kV Trishuli-Balaju transmission line. Repair and maintenance of Unit no 7 Excitation System and installation of excitation field breaker in unit no -6 was carried out.

Repair of spillway slab at desander and removing of trash, sand from B0 Reservoir trash rack were carried out. Boundary Wall construction works around NEA owned territory were also done in this fiscal year. As Trishuli River carries large quantity of silt, after upgrading of Trishuli Hydro power plant due to increase of discharge capacity, desander capacity has proven to be insufficient during wet season. NEA, Engineering Directorate is involved for detail engineering and design of Trishuli Desander upgrading and balancing reservoir. Instrumentation, control and monitoring system needs major upgrading for which preparation works are being carried out.

Trishuli Hydropower Station, located at Trishuli, Nuwakot, previously with installed capacity of 21 MW consisting of 7 units each of 3 MW commissioned in 1967 AD and developed jointly by Government of India and Government of Nepal at a cost of INR 140 million. It was rehabilitated in 1995 AD and upgraded to 24 MW with 6 units each of 3.5 MW and one unit of 3 MW. It is a peaking run-of- river hydropower station with annual design generation of 163 GWh. The power station is in continuous operation since commissioned around forty five (45) years ago.

The cumulative generation of Trishuli HPS has reached 4,449.31 GWh till 2011/12 from its first run. The station has generated 128.25 GWh in FY 2010/11 and 134.77 GWh in FY 2011/12 with an increase of 5.09percent. The generation from this station contributed 3.23 percent of the total energy in the INPS in 2011/12.

Salient Feature: Type Peaking-run-of-river Location Trishuli, Nuwakot Installed capacity 24 MW (peaking capacity 21 MW) Annual average energy 163 GWh Maximum Net head 51.4 m Catchment area 2600 km2 Average annual flow 45.66 m3/sec. Dam 139.6 m length Total length of the 4,792 m waterways 71.66 m long, Ø 2.3 m, 3 Nos., steel lined 89m long, Ø 1.5 Penstock m, 1 No., steel lined Turbine Number and Type 7, Francis Rated discharge 7.8 m3/sec.

82 Rated output 3,620 kW Rated speed 500 rpm Generator Rated output 3889 kVA Rated voltage 6.6 kV Rated frequency 50 Hz Power factor 0.9 Power transformer 5 MVA, 6.6/66 kV, single phase, 6 Nos. Transmission line 66 kV, 27.36 km, Double circuit

13. Devighat Hydropower

Devighat Hydropower Plant is a cascade development of Trishuli Hydropower Plant with installed capacity of 14.1 MW and annual design generation of 114 GWh. It is located at Devighat, Nuwakot and was commissioned in 1984 AD. Improved operational performance is observed after successful completion of renovation, modernization and upgrading (RMU) in 2010/2011. The capacity of the units was improved and upgraded to 15 MW and the actual generation of this year is 97.61 GWh.

Currently, all 3 units are operating satisfactorily, moreover major maintenance works completed in fiscal year 2016/17 include motorization works of flushing gate instead of manual operation, maintenance of bypass valve of unit No. 1, maintenance of dewatering & drainage pump, repair of Samari khola syphon, gabion protection works in the Samari khola, fencing works on the side of open canals, repair and construction of school building, repair of water leakage due to earthquake in expansion joints (only some portions) of the concrete structures of ground floor of power house, repair of quarter building damaged during earthquake and 66kV SF6 breaker maintenance by replacing new link pin of operating mechanism. Furthermore, Governor and SCADA system need repair and maintenance which will be carried by suitable experts in next fiscal year. Preparation for overhauling of runners is on the process and is being planned to be implemented by utilizing the shutdown period of Trishuli HPS during FY 2017/18.

Devighat Hydropower Station is the cascade hydropower station of Trishuli power station. It is located at Devighat, Nuwakot with installed capacity of 14.1 MW and annual design generation of 144 GWh. It was commissioned in 1984 AD and developed in assistance from Government of India and Government of Nepal with the total cost of NRs. 750 Million including transmission line. The rehabilitation of all the three units at a cost of INR 338.15 million was successfully completed by the contractor BHEL and handed over to NEA on 13 July 2011. The capacity of the units is improved and presently, all the three units are in normal operation. The operational capacity is based on the availability of the flow released from the upstream Trishuli Hydropower Station.

83 After the successful completion of RMU project in Devighat in fiscal year 2010/11, the generation has been satisfactory and is limited only by the obstacles in generation faced by upstream plant of Trishuli in one of its unit.

The cumulative generation of Devighat HPS has now reached 2309.38 GWh till 2011/12 from its first run. This station generated 74.13 GWh in FY 2010/11 and 105.09 GWh in FY 2011/12 with an increase of 41.76 percent. The generation from this station contributed 1.92 percent and 2.51 percent of the total energy to the INPS in FY 2010/11 and 2011/12 respectively.

Salient Feature: Type Cascade of Trishuli Hydro Power Station Location Battar Municipality, Nuwakot District Installed capacity 15 MW (after rehabilitation) Annual average energy 114 GWh Maximum Net head 40.5 m, 39 m Catchment area 4150 km2 (upto Trishuli diversion) Average annual flow 40.5 m, 39 m Maximum Net head 45.3 m3/sec. Dam Total length of the waterways 4.5 km from Trishuli HPS tailrace to Devighat HPS forebay Penstock 3 Nos., Ø2.5m, steel lined Turbine Number and Type 3, Vertical Francis Rated discharge 14.3 m3/sec. Rated output 5.03 MW Rated speed 333.3 rpm Generator Rated output 6.25 MVA Rated voltage 6.6 kV Rated frequency 50 Hz Power factor 0.8 Power transformer 6.3 MVA, 6.6/66 kV, 3-phase, 3 Nos. Transmission line 66 kV, 37 km (Devighat -Chabel), 28 km (Devighat - Balaju), Double circuit

14. Panauti Hydropower Station

Panauti Hydropower Station built in 1965 with the assistance of the then USSR, is located at Khopasi, Panauti, 35 km east of Kathmandu. The scheme was an installed capacity of 2.4 MW and annual design generation of 6.97 GWh. The Project was designed for operation of only two units at a time with third unit as a standby. Power canal of 3,721 m long with discharge of 3.2 m3/sec. from headwork to reservoir has seven (7) outlet gates for irrigation in the vicinity of Khopasi and also for drinking purposes as well.

84 Salient Feature:

Type Run of River Location Panauti Municipality–12, Khopasi Installed capacity 2.4 MW Annual average energy 6.97 GWh Maximum Net head 66m /60 m Catchment area Average annual flow 3.2 m3/sec. Live storage volume 50,000 m3 Dam Total length of the waterways 3.721 km Penstock 1 No., 370 m long, 1.4 m Turbine Number and Type 3, Horizontal Francis Rated discharge 1.61 m3/sec. Rated output 0.85 MW Rated speed 1000 rpm Generator Rated output 1000 kVA Rated voltage 6.3 kV Rated frequency 50 Hz Power factor 0.8 Power transformer 1550 kVA, 6.3 kV/33 kV, 3 phase, 2 Nos. Transmission line 33kV, 20 km, single circuit

15. Khimti I Hydropower

Khimti I Hydropower Plant is built with private sector funding as a “BOOT” agreement (Build, Own, Operate, and Transfer) with GON. Construction commenced on 26th June 1996 and Commercial Operation commenced on 11th July 2000.

HPL operates the plant and sells electricity to Nepal Electricity Authority (NEA). The plant will be transferred to GON at the end of the 50 year license period. At the end of the first Power Purchase Agreement NEA will purchase a 50 percent share in the Khimti Power Plant for a nominal fee.

The Khimti I Hydropower Project site is located in the Janakpur Zone, Central Development Region, some 100 km east of the Kathmandu. Khimti Khola forms the boundary between Ramechhap and Dolakha Districts. Access to the site is by the existing Jiri road 175 km from Kathmandu.

The plant is a “run of the river” hydro-electric power generation plant designed for an installed generating capacity of 60,000 KW and annual production of 350 million kilowatt-hours of electrical energy (350 GWh).

85 The site is located in Dolakha and Ramechhap District. The power plant utilizes a drop from 1270 to 586 m above sea level in Khimti River, a tributary to the Tamakoshi River.

Construction work on the Khimti I Hydropower Project was started in early 1993 by the Butwal Power Company Limited and then gained momentum upon Financial Closure in June 1996. The major structures of the project include the Head-works (intake, de-silting basin), 7,900 m long headrace tunnel with 4 construction audits, 1,000 m long penstock tunnel, 900 m access tunnel and 1470 m long tailrace tunnel through a 6,700 m3 underground power house.

The civil design and construction works of the project were carried out under a contract by a consortium of NCC Tunnelling, formly Statkraft Anlegg (Norwegian company) and Himal Hydro (Nepali Company). A consortium of Alston Power, formerly ABB Kraft and Kvarner Energy along with Nepal Hydro & Electric (Pvt.) Limited carried out all electro-mechanical work. Similarly a consortium of Statkraft Engineering and BPC Hydro Consult had managed the project on behalf of HPL.

The project holds the record for achieving the highest national tunneling productivity; it has the longest headrace tunnel and penstock in the country. It is also the first project in Nepal to implement a Total Quality Assurance Scheme during construction. Above all, it is the first major hydropower project in Nepal to be completed within the original schedule despite very difficult tunneling conditions and other problems encountered.

16. Jhankre Khola Hydropower

HPL has carried out rural electrification as well as rural development work under Jhankre Rural Electrification and Development Project (JREDP). The main objective of JREDP was to improve the quality of life of rural people within the project area by extending the existing rural electrification and development activities for the project period. Upon completion of JREDP the following was achieved: • Access to clean energy for 4,160 households • Rehabilitation and upgrading of 630 KW Jhankre Mini Hydropower plant • 66 SMEs were established • 35,000 people from the project area and adjacent locations directly benefited from construction of basic infrastructures such as toilets/biogas plants, water supply and irrigation schemes, schools and trails, roads and bridges • 151 women and 47 youths received skill enhancement trainings and have access to alternative income generation sources • Awareness increased among the minority population through informal literacy programs • Local markets developed with the help of improved road access • Establishment and institutional development of an electric cooperative (KREC)

86 17. Jhimruk Hydropower

Jhimruk Power Plant generated 69.50 GWh with plant factor of 66.11 percent, a decrease of 9.07 percent (6.93 GWh) over the last year. Out of total available energy, 63.59 GWh (88.71 %) was sold to NEA and 6.45 GWh (9%) was sold to BPC Distribution. The high silt content in Jhimruk River water during monsoon season remained the major factor for severe erosion of turbine parts. Overhauling of all turbine parts which include runners, guide vanes, side covers, sealing rings, shaft seals and others were carried out. The preventive maintenance was carried out as per the schedule. Various mitigation works were carried out to optimize the use of water for irrigation and increase the generation. River training works to protect the project area and farmers’ land was carried out.

The major maintenance of Jhimruk Plant has been planned in Jestha to Bhadra, so that the efficiency of the turbine can be gained for rest of the period in that year in order to maximize the generation.

The Jhimruk hydropower plant is a 12 MW run-of-river plant built and commissioned in 1994. Owned and operated by Butwal Power Company (BPC), Jhimruk is located in the Pyuthan district in the Mid-Western Region of Nepal. The project benefits from a 205 m net head caused by the water diversion from the Jhimruk river to the Madi River. Both rivers meet around 30 km downstream.

The project includes a weir in the Jhimruk River that diverts water to two parallel settling basins, before it is conveyed at a design discharge of 7.05 m3/sec. to the semi-underground powerhouse through a 1 km long headrace tunnel and a 250 m long penstock. The water is finally discharged in the Madi River through a short tailrace channel.

The diversion weir has a curvilinear shape with 205 m overflow length. The crest elevation is at 738 masl. Following the conventional design criteria of similar projects in Nepal the settling basins, of dimensions 42 m long, 5.5 m wide and 7 m deep, were designed to trap 90 per cent of particles larger than 0.2 mm. The powerhouse hosts three Francis turbines of 4 MW each.

Salient Features:

Location : Pyuthan District Type : Run of the river with daily pondage Capacity : 12 MW Annual Energy Production : 72 GWh In Operation since : 1994

18. Bheri Babai Diversion

Bheri Babai Diversion Multipurpose Project (BBDMP) classified the Government of Nepal as "Project of National Pride" and about 562 km far from

87 Kathmandu, is aimed to transfer 40 m3/sec. water from Bheri-River to Babai River under a head of about 150m to provide round the year irrigation to 51,000 Ha cultivation land in Bardiya and Banke districts. Present mandate of BBDMP is to develop headworks, headrace tunnel and related infrastructures to divert the water from Bheri River to Babai River and also to utilize the head available. A power house on the bank of Babai River will be constructed that will generate power of about 48 MW. BBDMP includes three major components, namely about 12.34 km long 4.2 m dia tunnel, headwork and desanding basin to be constructed in Bheri River end, and third components include fore bay, penstock, powerhouse and electro-mechanical parts of BBDMPP is located in Babai River end.

Geologically, the project area lies in the region occupied by the rocks of the Siwalik Group with the overburden above this. This Siwalik zone consists of sedimentary rocks of fluvial origin belonging to the Neocene age. These rocks are broadly classified into units namely the Lower Siwalik, Middle Siwalik and the Upper Siwalik. Construction of tunnel of this size in such geological formation itself is a challenging task. Considering the technical difficulties in the construction of tunnel with the application of prevailing technology of Drill and Blast Method, it has been decided to use Tunnel Boring Machine (TBM) to construct the tunnel which will also be lined with precast concrete segmental lining. It is going to be used first time in Nepal and first time in Siwalik geology that TBM technology is to be applied for tunnelling.

Nepal has a great task ahead to enhance the agricultural production by improving and increasing reliable and adequate irrigation facilities to meet the food requirement of the ever-increasing population. So building-up a reliable and year-round-irrigation system, especially in the rural area, is the pressing need of the country to ensure food security and to lower down its level of poverty, through increased agricultural productivity.

Water resources that are primarily needed for irrigation development are abundantly available in the country if considered on annual basis. It has been estimated that more than 225 billion m3 of surface water is available every year in the country. However, less than 10 percent of available water has been so far utilized in the country for the irrigation purpose. Most of the irrigation systems in Nepal draw 5,555 from small and medium sized rivers, which Ave sufficient flows during wet months of June to September and dry up or have little discharges during the remaining months. As a result, the farmers of the most of the irrigated areas in Nepal have not been able to irrigate fields at the time when they need the irrigation water at the rnost, thus affecting the productivity, which As been the main cause for low incomes of the farmers.

In order to meet the poverty alleviation targets as laid out in the Tenth Plan and subsequent three-year interim plan, the Department of Irrigation intends to develop irrigation infrastructure wherever it is techno-economically viable. In its with this responsibility the Irrigation Projects Development Division and Sub- division offices of the Department of Irrigation is entrusted to carry out implementation as well s preparation work of irrigation development projects.

88 Various irrigation development programs have been launched; the larger ones are implemented as separate project whereas small projects are implemented in a cluster of sub-projects approach.

In this context, Bheri Babai Diversion Multipurpose Project BBDMP is the first of its kind of inter-basin water transfer project conceptualized to provide round the year irrigation facility to 51,000 ha. of land of Banke and Bardiya district. Therefore, it has two components i.e. Hydropower and Irrigation. It involves construction of intake at Chiple of Ramghat VDC in Surkhet, 12 km long tunnel across the youngest mountain chain, i.e. Siwaliks, surge shaft and powerhouse at Hattikhal, Bardiya. For the first time in Nepal, Tunnel Boring Machine (TBM) is used to excavate the tunnel through fragile rocks of Siwaliks. Seeing its importance for the overall development of Nepal, Government of Nepal has nominated it for Project of National Pride.

The construction of tunnel is in progress after signing the agreement with MIS China Overseas Engineering Group Co. Ltd. On 29 January 2015. Presently, 100 m of tunnel has already been constructed.

19. Chatara Hydropower

Chatara Hydropower Station, a canal drop type power station, is located at Chatara, Sunsari with an installed capacity of 3.2 MW and annual design generation of 6 GWh. It was commissioned in 1996 AD with the assistance from Government of India at a cost of NRs. 162.6 million. The plant which was originally designed to be a captive plant for powering Dredger pumps to flush sediments from the Canal was later handed over to NEA by Sunsari Morang Irrigation Project on 29 March 1999. Presently, the plant is in shutdown condition since last year due to problems in turbine parts, for which a contract agreement for the renovation & modernisation of unit no. 2 has been done with Andritz Hydro, being OEM of the plant and the works are being continued in this fiscal year. The governor, excitation panel and synchronizing panel seals, bushes, instrumentations of unit no. 2 will be replaced by new ones after being delivered to CHPS site by Andritz Hydro. All the dismantled Turbine parts like runner, turbine shaft, and pinion shaft have been repaired in workshop and delivered to CHPS site. The unit will be running after complete overhauling targeted to be completed by this fiscal year (2017/18). After completion of overhauling of unit no. 2, future plans are to start for complete overhauling of unit no. 1.

Salient Feature:

Type Canal Location Sunsari Morang Installed capacity 3.2 MW Annual average energy 6 GWh Maximum Net head 5.38 m Turbine Number and Type 2, Kaplan Rated speed 165 rpm

89 Generator Rated output 1627 kW Rated voltage 11 kV Rated frequency 50 Hz Power transformer 3500 kVA, 11/33 kV Transmission line 33 kV, 14 km

20. Puwa Khola Hydropower

Puwa Khola Hydropower Station is a run of river type of plant with an installed capacity of 6.2 MW and annual design generation of 48 GWh. It is located at Golakharka, Ilam and was commissioned in 1999 AD jointly by the Government of Nepal and NEA at a cost of US$ 15.7 million. It has two identical pelton turbines of 3.1 MW each and has generated 36.41 GWh of energy this year, exceeding the last fiscal year's generation by 7.63 percent thereby generating its maximum energy in a fiscal year till date, surpassing its previous best generation of 34.64 GWh of 2005/06. Major works carried out this year in electromechanical section include replacement of broken/ cracked pipeline and valves of hydro-mechanical system, replacement of 33 kV Protection Panel at control room, replacement of 1,250 Ampere VCB of main Breaker at high Voltage Room, replacement of rotating diodes of the excitation system. Similarly major maintenance works in civil section are maintenance of quarters at office premises and maintenance of drinking water supply system for office, quarter and power house.

Salient Feature:

Type Run of river Location Ilam Installed capacity 6.2 MW Annual average energy 48 GWh Maximum Net head 304 M Catchment area 125.1 km2 Average annual flow 2.5 m3/sec. Live storage volume 2057 m3 Dam Diversion Weir Type, 30.4 m Crest Length Total length of the waterways 3.7 km Penstock 1 No., 1001m Long, 1.10-0.60 m, Steel Pipe Turbine Number and Type 2, Horizontal Pelton Rated discharge 1.25 m3/sec. Rated output 3.3 MW Rated speed 600 rpm Generator Rated output 3.7 MVA Rated voltage 6.6 kV Rated frequency 50 Hz Power factor 0.85 Power transformer 8 MVA, 6.6/33 kV, 3 Phase, 1 No.

90 Annex 4: Three Case Studies from Mekong River Basin on Trade-offs between Hydropower and Irrigation

A4.1 Nam Ngum Hydropower in Lao PDR

The Nam Ngum River is a tributary of Mekong River, located in Lao PDR (see Figure A1). The river has a total length of 415.5 km. The Nam Ngum River confluences with the Mekong River near the Lao capital of Vientiane. Before confluence with the Mekong River, it severs to two agriculture land areas i.e. the Xiengkhouang Plateau, including the Plain of Jars located in the upper part of the Nam Ngum River Basin and the Vientiane Plain in the lower part of the basin where the Nam Ngum River forms numerous meanders before connecting into the Mekong River. Altogether, the Nam Ngum River Basin covers an area of 16,700 km2 (7 percent of the total area of the country). The Basin ranges from 155m above sea level at the confluence of the Nam Ngum River the Mekong River to 2,820m in Phou Bia Mountain, so, the basin is mostly hilly and mountainous in nature. The Nam Ngum Basin is home to around 500,000 people, representing approximately 9 percent of Lao PDR’s total population. Its flows contribute 4 percent of mean annual flows and up to 15 percent of dry season flows of the Mekong River. Several new irrigation projects are in various stages of planning as part of a larger government strategy to turn the basin into a national and regional production area for rice and vegetables (Lacombe et al., 2011; Bartlett et al., 2012; Lacombe et al., 2014)

At the same time, Nam Ngum Basin attracts the most economic interest for its hydropower potential. Figure A1: The Nam Ngum Basin, including current As of 2014, the basin and planned hydropower dams already has four (Source: Bartlett et al. 2012) hydropower dams. The electricity generation is critically important for meeting current and future energy demand in the rapidly growing cities and towns throughout the lower Mekong Basin (Bartlett et al., 2012; Lacombe et al., 2014).

The trade-offs between hydropower production and irrigation are modest in Nam Nugm Basin. Hydropower and agricultural expansion are found to be complimentary under high level of water availability, as even the most ambitious level of irrigation expansion would reduce total hydropower production by only a modest amount. So, the energy expansion and expanded food production could

91 go hand in hand in the Nam Ngum Basin. All of these results generally follow from the fact that the dams would optimally be operated to maximize storage during the flood season and to slowly release water during the dry season, which is also beneficial in terms of irrigation requirements, ecological low flows, and downstream flood control (Lacombe et al., 2011; Bartlett et al., 2012; Lacombe et al., 2014; Zeng et al., 2017).

A4.2 The Sesan River Catchment

The Sesan River Catchment is situated in transboundary location of Vietnam and Cambodia (see Figure A2). It is also part of the Mekong Basin. Around 840,000 people live along the Sean River Catchment. The catchment covers 18,684 km2 where the potential irrigable area is 28,348 ha, of which 18,472 ha is located in the Upper Sesan and 9,876 ha. in the Lower Sesan. The landscape of catchment varies from the lowland (60 m. to 300 m. above sea level) of Cambodia in the west to the highlands (300m to 700m above sea level) and the Annamite mountain range (1000 m to 2100 m above sea level) located in Vietnam in the east. The Sesan River flows more than 440 km before joining with the Srepok River. Both rivers mix with Sekong River and form the 3S River catchment before confluence with Mekogn River (Räsänen et al., 2013; Räsänen et al., 2014).

Figure A2: The Mekong Basin with Sesan in the middle, Srepok in the south, and Sekong in the north; the map shows also the 12 dams (Source: Räsänen et al. 2014)

The Sean River is undergoing extensive hydropower planning and construction. There are altogether twelve dams exist where seven dams are located in the upper part of the catchment in Vietnam and five dams are located in Lower Sesan Cambodia. Both countries are planning to build one more dam in the Upper Sesan, Vietnam and four more dams in the Lower Sesan, Cambodia. Among these 12 dams, nine dams are designed mainly for power generation and only three, Pleikrong, Yali, and Sesan 4, are designed to facilitate irrigation (Räsänen et al., 2014).

92 The estimated irrigation demands in Upper (Vietnam) and Lower (Cambodia) Sesan River Basin are on average for the dry season 12,450 m3/ha/year and 13,251 m3/ha/year, respectively, whereas the demands for the wet season are 2,223 m3/ha/year and 2,718 m3/ha/year, respectively. The slightly higher irrigation demand in the Lower Sesan results mainly from the warmer and drier climate condition compared to the Upper Sesan (Räsänen et al., 2013; Räsänen et al., 2014).

It is estimated that annual hydropower production of nine hydropower projects is an average 13,056 GWh without irrigation. The irrigation of 28,348 ha results average in total of -1.6 percent reductions in the annual total hydropower generation. The largest impacts are experienced in downstream hydropower project because of accumulating water abstraction for irrigation along the river. The majority of the reductions in hydropower generation occurred in the dry season (Grimsditch, 2012; Räsänen et al., 2013; Piman et al., 2013; Räsänen et al., 2014).

The Upper Sesan River Basin has active storages large enough to store and regulate water for the irrigation of the whole potential of suitable land area. At the border of Vietnam and Cambodia, the outlet of the Sesan Catchment, the largest flow occurs in March (+175 % and +120%, respectively in dry season). The largest flow decreases in the same locations occurs in August (13% and - 21% respectively in wet season). The average seasonal flow changes at the outlet of the Sesan are for the dry season (December-May) +53 percent and wet season (June-November) -11 percent. This indicates that the development of multipurpose dams would potentially increase agriculture production and the overall benefits of hydropower project in the Sesan River Catchment with minor losses in hydropower generation. In addition, 70percent of the dry season flow originates from the Upper Sesan (Vietnam), so the Lower Sesan’s water related activities are totally dependent on development and operations in the upper part of the catchment (Piman et al., 2013; Räsänen et al., 2014).

It has also noticed that the hydropower and agriculture development lead to significant land use change in the Sesan River Catchment. The existing dams inundated 19,800 ha (198 km2) of land. The total inundated area would be around 103,500 ha (1,035 km2) which corresponds to 5.5 percent of the land area of the Sesan River Catchment, if all the planned dams were constructed (Räsänen et al., 2013; Räsänen et al., 2014). Thus, the hydropower dams would provide irrigation potential, at the same time, they reduce the overall agricultural potential and adversely impacts on the aquatic and terrestrial ecosystems in the catchment (Piman et al., 2013).

A4.3 Impact on Mekong Delta, Vietnam

The Mekong Delta is located in southwestern Vietnam (see Figure A3). It covers around 39,000 km2 area with including 2.6 million ha agriculture land. The Mekong Delta lies at only 5 m or less above the sea level and faces 6 mm of relative sea level rise every year. This threat in particular gives the Mekong Delta’s 20 million inhabitants, and their substantial agricultural products.

93 Vietnam had successfully developed and specialized rice exporting economy in the Mekong Delta, and exporting upwards of 7 million tonnes a year. Some estimates suggest the supporting channel network stretches 87,500 km in total. Man-made ring dykes for protecting paddy field which is about 14,600 km of length. These dykes control the annual monsoon floods. In the coastal and south- west regions a variety of crops and shrimp farming can be found. Crop choices near the coast are often forced due to the damaging effect of saline instruction which extends up to 50 km inland during the dry season (WB, 2008; MRC, 2010; Chapman, 2016).

There are more than 100 hydropower dams which have been constructed in upstream of Mekong Delta. They regulate the water flow of Mekong River. These dams would significantly reduce the suspended sediment load and associated nutrients. The reduced sediments and nutrient flows would adversely decrease agriculture production in Mekong floodplains, especially in Mekong Delta (Nhan et al., 2007; Anthony et al., 2015; Chapman, 2016).

Figure A3: The Mekong River Delta (a) in Vietnam and hydropower dams in the Mekong River Basin (b) (Source: Anthony et al., 2015)

International scientists have warned of profound environmental and social impacts from these hydropower dams, and they anticipate even greater adverse consequences in the future. These practices in the upstream cause massive impact in Mekong Delta. If water level in Mekong River goes down, the salinity intrusion threatens in large portion of agricultural land in Mekong Delta. In addition, drinking water supplies are often severely affected by salinity. These types of incident directly impact on agriculture production, human health as well as aquaculture (Nhan et al., 2007; WB, 2008; Anthony et al., 2015; Chapman, 2016; Blake and Robins, 2016;).

94 Annex 5: Interviewed Personnel during Reconnaissance Study

S.N Projects Name of the people Designation interviewed 1 Seti Tanka Acharya Deputy Plant Incharge Balaram Kuwar Pokhara Water use and irrigation system users committee Krishna Prasad Gautam Pokhara Water use and irrigation system users committee Buddhi Sagar Tiwari Temporary Staff of Irrigation Division, Water distributor at "Dui Kulo ko Muhan" 2 Chief Division Office Tusli Bhattarai Divisional Chief Engineer Pokhara 3 Task Lekhnath Plant Incharge Samir Pandey Engineer 4 Fewa Punnari Baral Chairman, Fewa Irrigation Water User Association Laxman Badai Secretary, Fewa Irrigation Water User Association Hom Nath Bhandari Fewa Irrigation Water User Association Lal Bahadur Tamang Local Farmer 5 Bijaypur Niraj Poudel Plant Incharge Ram Bahadur Thapa Founder member Bijayapur Irrigation Water Users Association Bal Prasad Poudel Secretary Bijaypur Irrigation Water Users Association 6 Sardi Kulesh Khatiwada Plant Incharge Deepak Poudel Chairman, Sardi Khola Puranchaour Irrigation Water Users Committee 7 Mardi Kiran KC Company director Tek Bahadur Shrestha Local farmer, social worker Durga Prasad Dahal Secretary, Machhapuchhre Village Committee ward 9 Krishna Bahadur Gurung Member, Machhapuchhre Village Committee ward 9 8 Aadhi Khola Hydropower Dhol Bista Plant Incharge Project Khagendra Bhattarai Ex-chairman AKWUA 9 Rainastar Irrigation Users Yub Raj Kandel Chairman, Rainastar

95 S.N Projects Name of the people Designation interviewed Association 10 Marsyangdi Abu Khaireni Badri Prasad Foyal Plant Incharge Santa Bahadur Khadka Operator 11 Tanahu Seti Reservoir Netra Ranabhat Secretary, Concern Group Bidur Civil Engineer, Tanahu Hydropower Rok Bahadur Gurung Local Navraj Gairey Local Murali Gairey Local 12 Irrigation Division Office Hari Datta Poudel Chief Divisional Engineer Tanahu 13 Irrigation Division Office Lok Bahadur Thapa Chief Divisional Engineer Lumjung 14 Ramchowk Phat Irrigation Hom Nath Doiliya President Water Users Group Arjun Raj Sedai Treasurer 15 Khudi Hydropower Project Ramesh Ghimire Plant Incharge Asok Nepal Accountant Ram Krishna Gurung Local 16 Khimti Hydropower Project Ishwor Man Desai Plant, Incharge Chaman Singh BK CSR officer 17 Jhakre Micro Hydropower Takur Shrestha Plant officer Project Thirtha Raj Dhungel Dhama Khare Irrigation Water Users Association Shiva Prasad Neupane Chairman Khimti Besi Irrigation Water Users Association Shiva Bahadur Thapa Ward Member, Likhu Tamakoshi Village Committee Sher Bahadur Khadka Farmer 18 Jhimruk Hydropower Shyam Thapa Plant Incharge Project Purna Bhandari Chairman, JIDCO Num Prasad Shrestha Farmer Balika Bhandari Farmer 19 Bheri Babai Rukmang Khanal

96 S.N Projects Name of the people Designation interviewed 20 Sunsari Morang Shree Prasad Shah Senior Divisional Engineer Shree Krishna Shah Binod Prasad Pandey Plant Incharge, NEA 21 Puwa Khola Project Pralad Rawat Plant Incharge Dharma Poudel Engineer 22 Trisuli Hydropower Project Suraj Dhakal

97 Annex 6: Mai, Jog Mai and Puwa Khola Water Infrastructure Development3

Irrigation River Hydropower Capacity Year of Irrigation Down Remarks Name (HP) Name of HP Construction Upstream Stream Mai Cascade 7 MW 2015 None None Upper Mai 10 MW 2016 None None Mai small 8 MW 2018 None None cascade Sani Mai 22 MW 2014 None None Mai Himal Dolkha 4.5 MW 2008 1 irrigation Registered Khola (15 Ha) WUA, constructed before HP Maintenance cost provided, water sharing agreement Jog Mai Jog Mai Khola 7.6 MW 2016 3 irrigation None Water sharing systems arrangement (3ha) Upper Puwa 3 MW 2014 3 canals None Agreement to Khola (3ha) share water Puwa Khola I 4 MW 2016 5 irrigation and periodic systems (25 assistance ha) grant Repair and Puwa maintenance Khola grant, 4 lakh support grant Puwa Khola 6.2 MW 2008 1 irrigation, Periodic old one support and (2ha) water sharing arrangement Note: Information was collected by Namsaling Community Development Committee (NCDC) in 2018

3All the hydropower projects operate full capacity only for 4-5 months in monsoon. During winter, they operate in 50 or less percentage capacity. Out of 2 to 3, turbines, only one will be generating power. Out of installed 71.6 MW capacity, only 50 percent would be generated for 6 dry months. Out of 8 HP Projects studied, 12 irrigation systems were identified mostly upstream of the hydropower intakes. However, they have relation in water sharing so there is agreement in all irrigation system and HP Project for giving grant for repair and maintenance and water sharing agreement. In terms of growth of HP projects in these river systems, it has been phenomenal. The first one is Puwa Khola of 6.2 MW constructed in 2008. Within a period of 10 years, 8 more HP projects were added. This requires now proper water sharing and water management in the sub-basin systems. It might emerge now water sharing negotiations among the hydropowers themselves and hydropower and irrigation systems and drinking water for growing urban populations.

98 Annex 7: Local Benefit Sharing in Hydropower Projects

CSR (NRs.) Post Local Equity Shares Local Infrastructure Skill/Community SN Project Name Commission (NRs.) Employment Development Development 1 Fewa No No No Irrigation cum hydropower No 2 Seti No No No Irrigation cum hydropower No 3 Bijaypur 400,000 per year 700,000 worth 35 Road Carpeting, provided Scholarships for two girls, worth activities promoter shares to fund such as 15 lakh and 95 livestock rearing training and on demand base Bijaypur Water Users lakh to two schools for their seed money to rear livestock for group and 750,000 infrastructure development 8 squatter Households (HH) worth promoter shares to Seti Water Users Group 4 Task 100,000 per year No 3 No No for renovation and cleaning of canals 5 Aadhikhola 20,00,000 per No 85 Irrigation canals, Vegetable farming, water year worth Community Hospital, supply, community hall, women activities on community Road empowerment training demand base, administrative support of 400,000 per year for AKWUA 6 Sardi 18,00,000 per 200,00,00 worth 6 2 Community hall, irrigation Salary payment of one lower year from 2020 promoter shares to canal (500m) secondary teacher for 30 years affected local 7 Mardi No No 15 15,00,00,000 rupees spent 20,00,000 rupees provided for to construct community two schools for infrastructure road from Hemja to Mardi development. 8 Jhimruk 2500,000 per No 40 River Training works Social Upliftment Programme year for Social Upliftment Program 9 Trisuli Devghat No No No No No 10 Bheri Babai No No No No No 11 Marsyangdi No No 17 Irrigation Pump 3.3 million rupees were spent in

99 various social development program during 1998/1999 12 Khudi 600,000 per year No 15 1.5 km road construction Khudi Concern committee to Khudi looked after social development Concern program. It includes health, Committee education and water supply 13 Dordi* No No 33 Motorable bridge worth 35 50 million rupees spent in million rupees, equipment social development work. 20 support for rural roads and million rupees more will spent irrigation intake before for the commission construction in plan 14 Tanahu Seti* NA NA NA NA 3-4 billion rupees are budget for social and environment development, 300 HH will served water supply, 1000 skilled human resource will be developed, 60 people were already given training to consume in the project 15 Khimti 10 million No 70 Gonger Irrigation scheme, Rural electrification, health rupees every School, Health Post care, water supply, biogas, year for 10 irrigation, establishing women affected villages cooperative 16 Jhakre No No No No No 17 Sunsari Morang No No No No No 18 NEA Puwa No No No Support for irrigation intake No 19 Panauti, Kavre No No No No No 20 Chaurjhari, No No No No No Rukum *Under construction project

100 Annex 8: Handover Report on Electricity Power House and Understanding between Nepal Electricity Authority and Sunsari Morang Irrigation Project

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