The Nepal Electricity Authority is preparing to generate an additional 100 megawatts of electricity from the Kulekhani reservoir in Makwanpur, marking the country’s first pumped-storage hydropower project. The proposed project, estimated to cost over Rs 15 billion, is expected to help reduce electricity imports during the winter months when domestic production drops.
The project will use water from the existing Indrasarovar reservoir as an upper storage system. A new lower reservoir will be built downstream along the Kulekhani River, where water will be released to generate electricity during peak demand hours, typically for six to ten hours a day. During periods of low demand, the same water will be pumped back to the upper reservoir, allowing it to be reused.
Authorities have begun environmental assessment preparations and are collecting feedback from local communities, particularly in wards 1, 2, and 3 of Indrasarovar Rural Municipality, which are expected to be directly affected.
The plan includes installing two turbines with a capacity of 50 megawatts each. A tunnel nearly two kilometres long will channel water to the powerhouse, while a new dam will create the lower reservoir with significant storage capacity.
The Kulekhani system currently produces 106 megawatts through three plants. However, its efficiency has declined over the years due to sediment buildup, which has reduced water storage capacity by around 30 per cent. This has also led to a drop in electricity generation and financial losses.
Officials say the new project could improve energy reliability while making better use of existing infrastructure, even as concerns around environmental impact and local disruption remain under review.