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Tanahu Hydropower Limited (THL) was established as a subsidiary company of Nepal Electricity Authority (NEA) on 25 March 2012 to develop Tanahu Hydropower Project (previously known as Upper Seti Hydropower Project). The Project site is situated 150 km west of Kathmandu on Seti River near Damauli of Tanahu District in Gandaki Zone. The company also envisages developing Lower Seti (Tanahu) Hydropower Project at the lower reaches of Seti River. The overall management of THL is entrusted to the Board of Directors, headed by the Managing Director of NEA.

The Tanau Hydropower project is the storage type hydropower project with the capacity of 140MW 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 Vyas municipality near Damauli, the district headquarter of Tanahun District. Eight VDCs and Vyas municipality of Tanahun district are directly affected by the project. The estimated cost of the Project is US$ 505 million as indicated in the table:

The main components of the Project are 140 m high concrete gravity dam with crest length of 175m on the Seti River and reservoir with a total surface area of 7.26 km2. The elevation of Full Supply Level(FSL) is 415m above sea level. The waterway consists of 7.4 m diameter and 1,203m long headrace tunnel on the right bank for the river. An underground powerhouse measuring 27m wide x 46m high x 97m 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 and Bhimad  two Municipalities. The VDCs are (i) Chhang, (ii) Majhkot, (iii) Bhimad, (iv) Jamune Bhanjyang, (v) Kotdarbar, (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.


Nepal has undergone acute energy crisis in the last decade. There was a huge supply gap well short of demand. The supply gap was more during the dry season in winter (November April). On the other hand, demand for electricity has been growing at 10% annually. The supply problem is becoming one of the biggest obstacles to economic growth. The proposed project is for the investments to help overcome this supply problem. In such scenario, Tanahu project has been formulated to assist Nepal to tackle energy security both urban and rural areas. Nepal is also expected to develop energy export projects. Tanahu will be a medium-sized hydropower plant (140 MW) with water storage to make power supply available year-round and meet the country’s peak demand in particular for the dry season. To promote the project, the Tanahu Hydropower Limited (THL) was established. The project will also support transmission facilities, some rural electrification. The impact will be expanded access to clean and sustainable energy in Nepal. Its outcome will be increased efficiency and reliable supply of hydropower energy. 3. The outputs will be (i) a 140 MW hydropower plant and related transmission system— 37 km, 220 kilovolts (kV)—made operational; (ii) rural electrification increased (covering 17,636 households).

Tanahu Hydropower Project has an installed capacity of 140 MW with an estimated annual energy generation of 502.5 GWh. The Project is designed for at least six hours of peaking operation during the driest month of the year. In the context of power deficit and import this project will plays a vital role in seasonal energy security and trade deficit as well.

Layout map

Project Dimension and Impact Zone

The project area covers 2 municipalities (Vyas and Bhimad) and 2 rural municipalities (Rhising and Maygde). The Vyas Municipality, with Damauli Town as district headquarter of Tanahun district, is a major urban settlement. This project is a reservoir project having 140 m high and 215 m long (crest length) concrete gravity dam with the reservoir capacity of 295 million cubic meter (effective reservoir capacity of around 192.8 million cubic meter). This is the largest reservoir project under construction after only one Kulekhani reservoir project of its kind since 1980s’. The reservoir will extend about 25 km upstream inundating the low-lying lands upto 415 masl having reservoir surface area 7.25 square kilometer along the Seti River from the dam site to near Bhimad Bazar of Tanahu district. The Project 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 from Powerhouse near Damauli to Bharatpur.

Location Map

Reservoir and Inundation Area of the Project

Land Acquisition and Compensation 

The Tanahu Hydropower project is categorized as category A for Involuntary Resettlement (IR) and for Indigenous People (IP) as per ADB Safeguards Policy Statement (SPS) 2009. In compliance with the SPS, a combined Resettlement and Indigenous Peoples Plan (RIPP) for Hydropower Component was prepared in 2012 by Project Preparation Technical Assistance (PPTA) Consultant which was updated in October 2018. The total affected household of Hydropower Component is 560 HH and Transmission Line component is 253 HH.

Summary of Project Impacts:

Process of Land Acquisition

Land Acquisition and Process: Land Acquisition Act 2034 (1977)

Land Acquisition Act 2034 (1977), is the act to acquire land for the public purposes. Government can acquire land at any place in any quantity by giving the compensation pursuant to the act for the land required for any public purpose or for the operation of any development project initiated by government (Clause 3 and 4). To decide the amount of compensation, there shall be a Compensation Determination (Fixation) Committee (CDC) chaired by CDO. CDC includes Land Administrator or Chief of the Land Revenue Office, a representative of the District Development Committee and Project Chief. CDC is the main responsible body to determine the compensation of land. It has full authority to determine the amount of compensation payable to landowners. Any person who is not satisfied with the amount of compensation may file a complaint with the Ministry of Home Affairs, the Government of Nepal within fifteen days from the date of the issue of the notice of fixation of compensation, and, in such cases, the decision of the Ministry of Home Affairs, the Government of Nepal shall be final determine the amount of compensation payable (Clause 25 sub-clause 7). CDO is the original jurisdiction in respect to offenses punishable under this act. CDO decision can be appealed in High Court.

THL appointed a consultant for demarcation of land in the reservoir area and identification of land parcels within full supply level. According to the report from cadastral survey consultant and district survey office conducted demarcation of inundation area and identified potential plots to be inundated due to the reservoir, THL started preliminary action relating to acquire Land. Coordinating with CDC, preliminary officer published a notice at place where people mostly move near by the concerned land, Concerned Village Development Committee and Municipality Office and House door or compound wall for the purpose of stakeholder.

The Land Acquisition Act, 2034 (1977) is the core legal document to guide the process related to land acquisition and relocation in Nepal. The clause 03 of the Act states that land could be acquired for a public purpose, subject to the award of compensation. According to clause 04 of the Act, institutions seeking land acquisition may also request the Government to acquire land subject to the payment of compensation by such institutions. Clause 27 of the Act provides for land acquisition through mutual agreement between a plot owner and a government department or agency, where the process of involuntary land acquisition outlined in the Act does not apply. The Act grants the project proponent the right to choose between a mutual agreement process and the formal process for land acquisition (as described below). Where clause 27 is applied and the plot owner is not satisfied with the compensation offered by the state, under the agreement, the owner could file a complaint with the Ministry of Home (clause 18 (sub clause 2) for a redress. As per the regulatory provision, before acquiring private land for a public purpose, the Government forms a Compensation Determination (Fixation) Committee (CDC) under the chairmanship of the Chief District Officer (CDO). The chief of the land revenue office (LRO) and a representative from the District Development Committee (DDC) and the Project Manager are the other members. A VDC representative and a representative of affected persons are also usually invited to participate in the Committee discussions. The project manager functions as the member secretary of the Committee. The CDC determines the amount of compensation considering the following factors: current price of land value, value of standing crops, houses, walls, sheds or other structures, loss incurred as a result of shifting residence or place of business.

The CDC takes also into consideration the relevant Acts and Guidelines of the government in this exercise. According to clause 06, if the land has to be acquired for institutions other than the local government bodies and government institutions, the Committee considers the following in determining compensation: (i) price of land prevailing at the time of notification of land acquisition, (ii) price of standing crops and structures; and (iii) loss incurred by the AP by being compelled to shift his or her residence or place of business as a consequence of the acquisition of land. 113. As stated in clause 09, subsection 03 of the Act, the duration of compensation payment days will be determined by CDC. Clause 37 of the Act illustrates that the Committee may extend the period by additional 3 months, if compensation is not collected by those entitled. After the extended 3-month period, the amount will be deposited in a government’s account. The compensation for acquired land is generally paid in cash as per current market value. However, there is also a provision under clause 14 to compensate land-for-land, provided Government land is available. The Act also provides for the possibility of paying two separate rates of compensation, distinguishing between households who lose all their land and those who lose only some part of their land. As stipulated in clause 10, affected households could take the crops, trees, and plants from acquired land, and salvageable materials. Clause 39 states that affected households could take all salvageable assets and the value of such assets will not be deducted from compensation. Any grievance and objection regarding the above will be referred to the grievance redress committee (GRC) as per clause 11 of the Land Acquisition Act, 2034 (1977). The Act assigns the CDO the sole responsibility of overseeing land acquisition process and activities and to deal with the grievances related to land acquisition and compensation.

Clause 20 of the Act entitles the legal tenant to 100% compensation for the structures built by him on the land with the permission of the landowner. 117. Clause 68 (1) of the Forest Act 2049 (1993) states that the Government may permit the use of forestland for a project of national priority. According to the clause 68 (2), if any loss to persons or community is involved while permitting use of such land, it is required to compensate the loss. The general process of land acquisition is outlined in Figure below:

Process of Land Acquisition Outline

CDO chairs CDC, which consists of representatives from district administration, land revenue department, and the project office. The representatives from the VDC and affected HHs are normally invited to participate in the CDC meeting as invitees. At the request of the EA, the Government makes a decision to have the land acquired (for the specified purpose), and an officer from the EA is appointed by the government to undertake the preliminary actions which include, among others, undertaking the survey of land to be acquired, and preparing the documentation to be submitted to the CDC. EA issues the first notice of intent for land acquisition. The survey information (i.e., draft resettlement/indigenous peoples plan) is then submitted to CDC providing relevant details such as the number of land parcels to be acquired, land use pattern, affected land owners, uses/land types, quantity of land to be acquired. The CDC reviews this information and based on the same issues the final notice for acquisition with details of land parcels to be acquired. Simultaneously, CDC/EA starts contacting the affected landowners/users and initiates the process of negotiation on land value (for acquisition). Once the negotiation process is complete, the CDC finalizes the value for acquisition of various properties and discloses the same to the affected persons. The district administration office (DAO) then invites the affected households to collect forms, duly fill and submit the same to DAO for collection of their compensation. The EA deposits the requisite amounts of cash for compensation with DAO. All compensation, either in cash or check, is disbursed through DAO to the affected people.

Status of Compensation Payment

Hydropower Component:

THL has started compensation payment works of camp site and access road from December 2012 that was completed in 2014. Similarly, compensation payment of reservoir area was started in February 2017. Out of 560 affected landowners, 514 (92%) have received the compensation amount until 30 September 2021. However, there are still some landowners who have yet to collect the compensation amount. Out of 46 remaining landowners, 15 have not received the compensation amount, 5 have complained in court not satisfied with the compensation amount decided by CDC, 10 land parcels details have not been found in Land Revenue Office and no affected persons has claimed these land parcels until September 2021. 16 Owners have legal and administrative hurdles so that they cannot submit their claim with valid title documents. The THL has deposited the compensation amount for all unpaid affected persons in the District Administration Office account.

Transmission Line Component:

THL has started compensation amount of transmission line of Tanahun District section from 3 September 2021. Out of 253 affected households, only 12 households have received the compensation as of September 30, 2021.  The compensation payment of this section has been delayed due to problems of parcel division in the cadastral map. THL is getting support from the Survey Office of Tanahun district to solve the problem.

House/ Structures

All 81 displaced residential house owners (61 with land title and 20 without land title) of Hydropower Component have collected the compensation amount of house/structures including displacement and other allowances as provisioned in RIPP. In Transmission Line Component, compensation payment of affected structures has yet to be started.

Crops, trees/fruits

The compensation payment of affected trees/ fruit are ongoing. In Hydropower component, out of 218 trees/fruit affected households, 210 households (99.9%) have collected the compensation amount. Similarly, Transmission Line component, THL has initiated the compensation determination for affected trees/ fruit trees.


Main Contract Packages

For the successful implementation of the project, the main works have been divided into three packages.  The three main packages are: 

Package 1: Dam and Reservoir

The one of the major components of the project is dam and reservoirs. It consists of mainly the dam construction and reservoir protection works. The procurement of this main package is delayed due to the multiple biding and rebidding resulting from failure to meet the procurement criteria and termination of the contract with CMC Ravina. Now, this contract package has been awarded to Song La – Kalika JV in March 2021.  Due to the restriction imposed by COVID and mason thereafter, Contractor has mobilized/commenced the work since 30 August 2021. The duration of the contract for the works under the scope of the contract is 57 months from the date of contract commencement. It consists of the all works of diversion tunnel, slope protection, river diversion (cofferdam), 140 m concrete gravity dam, reservoir, sediment flushing system etc.

Package 2: Powerhouse and Waterways

The scope of this package is all related works under powerhouse and waterways.  The main scope of the works under this contract package are all civil works of intake, head race tunnel, surge shaft, penstock tunnel/shaft, powerhouse cavern, tailrace tunnel and all adit tunnels like MAT, Cablle tunnel and other access road and tunnel. All the electromechanical and hydromechanical works of the project are under this contract scope.

This contract package has been signed between THL and the contractor Sino Hydro Corporation China in   October 2018 and commencement of the works is in Jan 2019.  up to now (Dec 2021) almost 30 % of the civil works has been completed.

Package 3: Transmission Lines

The project also includes the Transmission Lines (TL) component. A new 220 kV double circuits TL will evacuate the generated power from the powerplant to the new Bharatpur Substation. The length of the transmission line corridor is 37 km. This contract package has been awarded to KEC International in Dec 2018 and work has been commenced in February 2018.

Rural Electrification (RE)

One of the project benefits to the local people is the rural electrification component which has been administered from NEA, Project Management Directorate (PMD). The Project will electrify 18 VDCs through its Rural Electrification (RE) Program. The work package consists of construction of substation and construction of distribution line all over Tanahu district.

Consulting Services:

Project Supervision Consultant (PSC)

THL signed the contract agreement with M/S Lahmeyer International (now Tractebel Engineering GmbH) in association with Manitoba Hydro. International, Canada (“the Consultant”) as Project Supervision Consultant (PSC) on June 29, 2015. The contract period of PSC is twelve years. The consultant will assist one year for pre-construction activities particularly the preparation of tender documents and tender evaluation, six years for project construction period where PSC is engaged in construction supervision and design check submitted by the contractors and last five years for project operation and maintenance.

Environmental and Social Safeguard:  Key Partners

Being the reservoir project and having wide range of affected area than other infrastructure project, both socially and environmentally, the project has wide areas of environmental and social safeguard issues.  Thus, the environmental and social safeguard issues is one of the essential and key concern of each stakeholder. The impact assessment and the mitigation measures for the both environmental and social sector has been assessed and proposed in action plan for implementation. For facilitating the social and environmental safeguard, it has been envisaged Environmental and Social Monitoring Unit (ESMU) under THL management. ESMU is coordinating all the environmental and social safeguard planning and implementation. For the purpose of assisting to THL, Environmental and Social Monitoring Service Provider (ESMSP), an international environment consultant has been recruited by THL.  ESMU is a component established within THL headed by as environmental expert and sociologist for overall coordinating the environmental and social safeguard. The ESMU and ESMSP is also responsible for all activities related to the safeguard measures of construction activities labors relations and their health and hygiene, occupational health and safety issues etc. In overall ESMU and ESMSP partly PSC are responsible for HSE issues and concerns to meet the standard defined by the safeguard standard.

Environmental and Social Monitoring Service Provider (ESMSP)

For ESMSP, international environmental consultant ELC Electro-consult in association with GEOCE Nepal has been engaged for the consulting services. The scope of the contract is to assist THL in monitoring the safeguard issues and preparing for the environmental and social safeguard action plan. The contract has been awarded in May 2019.  

ESMSP is engaged in monitoring of contractor CEMP and the environmental and social safeguard action plan as envisaged under the scope of the contract.  Further, ESMSP has been engaged in public consultation, survey of project affected people/HH and preparing for the safeguard documents like consolidated environmental management plan, livelihood restoration plan, GESI plan, community development plan etc. as required under the safeguard policy and action plan.

Number of studies have been made for the project environmental and social safeguard issues. The assessment of the existing condition which can be referred as the baseline on environmental and social situation and the potential impact on environment like physical environment, biological environment, impact on forest, wildlife and fisheries etc.  Social and cultural impact, compensation and resettlement issues, gender and mainstreaming of marginalized and indigenous people and assessment of impact on livelihood and their livelihood restoration etc. are the key features of the social safeguard measures. Several compliances documents according to the national environmental act and regulation as well ADB/EIB policy framework have been / being prepared for safeguarding the affected people and the environment. Expertise involvement, stakeholder consultation has been extensively utilized while preparing those documents. The various study and action plan documents are:

Key Environmental and Social Safeguard Documents  

  1. Environmental Impact Assessment of Upper Seti Hydropower Project (2009)
  2. Environmental Impact Assessment of Upper Seti Hydropower Project (2012) Addendum
  3. Supplementary Environmental Impact Assessment of Upper Seti Hydropower Project (2017)
  4. Resettlement and Indigenous People’s Plan (RIPP) (2012)
  5. Updated Resettlement and Indigenous People’s Plan (RIPP) (2018)
  6. Updated Combined Resettlement and Indigenous People’s Plan (2018)
  7. Initial Environmental Examination (IEE) of 132 KV Transmission Line (2010)
  8. Supplementary Initial Environmental Examination (IEE) of 132 KV Transmission Line (2017)
  9. Revised Initial Environmental Examination (IEE) of 132 KV Transmission Line (2021) -In approval process
  10. Resettlement and Indigenous People’s Plan (RIPP) of Transmission Line (2020)
  11. Consolidated Environmental Management Plan (2018)
  12. Translated Documents
    1. पुनर्स्थापना तथा आदिबासी जनता योजना सारांश २०६९
    1. तनहुँ जल विद्युत आयोजना एक झलक २०७४
    1. अद्यावधिक पुनर्स्थापना तथा आदिबासी जनता योजना  २०७५
    1. प्रारम्भिक मुल्याङ्कन प्रतिवेदन २०७८
    1. Project Information Brochure 2078

Based on the impact analysis, various mitigation, and safeguard plans have been prepared/ being prepared for minimizing the impact, with reasonable action plans. The action plan has mainly focused on how the impact will be minimized and how the environment can be restored both in terms of biodiversity, livelihood, cultures etc. Those plans prepared/ being prepared are:

Environmental Safeguard/Management Plans

  • Forest and Watershed Management Plan
  • Dam and River Safety Management Plan
  • Fishery Management Plan
  • Wildlife Management Plan

Social Safeguard Plans

  • Acquisition and Compensation
  • Livelihood Restoration Plan (LRP)
  • Community Development Plan (CDP)
  • Gender Equality and Social Inclusion Plan (GESI)
  • Resettlement and Indigenous People Plan (RIPP)

Grievances Redress Mechanism (GRM)

THL has established Local Consultative Forums (LCF’s) as part of the Grievances Redress Mechanism to address the project related grievances of local level in Vyas Municipality Bhimad Municipality Rising Rural Municipality and Myagde Rural Municipality. In addition to record grievances and demands of PAP related to the project LCFs also act as a bridge to community from THL for channeling the information flow. All LCFs have two support staffs with office facilities within the respective Rural Municipality /Municipality. All staffs belong to project affected households.

For the grievances from the local community particularly of the affected communities. All complaints have been categorized under two major headings namely grievances and demands. Basically, grievances are related to compensation, livelihood restoration, damaged property, etc. and demands are related to request from local community to support development works, community health and safety and education support etc. Most of the grievances will be settled through consultation and discussion with affected people in local level but some grievances related to consult the higher level, legal disputes or required support from other government offices are taking some long time. The procedure developed for the handling of the grievances are as follows.

The Community Development Strategy (CDS)

CDS is the strategy developed for people in the hydropower affected area to recognize benefits from development of the project with long-term engagement. In the CDS, the Community Development Program (CDP) from various aspects including education, health, gender development, social inclusion, local economic development and livelihood activities are planned in the hydropower project affected area. Based on social and poverty survey and assessment carried out in the project area, the CDS is designed to increase the involvement of socioeconomically vulnerable persons including women, children, and socially excluded groups. CDS aims to enhance livelihood and improve quality of life of communities residing in the project area affected with direct adverse impacts.

Gender Equality and Social Inclusion (GESI) Action Plan:

While designing community development strategy (CDS), emphasis has been given to socioeconomically vulnerable persons including women, children, and socially excluded groups. CDS aims to enhance livelihood and improve quality of life of communities residing in the project area affected with direct adverse impacts. THL will implement CDS with emphasis on education, health, gender development, inclusion of socially excluded groups, and local economic development and livelihood promotion. Along with CDS, a gender equality and social inclusion action plan (GESI) will be implemented to empower and increase women’s participation, roles and status in their families and communities. The GESI will enable poor women and men’s participation in the energy sector projects, through the provision of technical and skills training increase employment opportunities, livelihood and entrepreneurial activities. To mainstreaming the gender role particularly of the women, vulnerable socially excluded group of Janajaties and Dalit as well as the women headed HH etc. in the affected families and communities, GESI action plan has been formulated and being implemented.