Nepal's Tanahu storage hydropower project reaches 78 percent progress

What happened

Progress moved from 77.5 percent in mid-August, as reported by Fiscal Nepal, to 78 percent in early October. The project is near Damauli in Tanahun district and is fully owned by the Nepal Electricity Authority (NEA) through its subsidiary, Tanahu Hydropower Limited. Project chief Shyamji Bhandari told Fiscal Nepal in August that work was on schedule. Work is split into three packages, each with its own contractor.

Package 1 covers the dam and headworks and is 63 percent complete, according to Khabarhub. A joint venture of Song Da Corporation of Vietnam and Kalika Construction is building it. The river diversion, the temporary dam, two diversion tunnels and the access road are finished. Concrete placement in the main dam began in Chaitra 2081, around March 2025. By October, 507,442 cubic metres had been placed in the 140 m high dam.

Package 2, built by Sinohydro of China, covers the waterway and the underground powerhouse and is 79 percent complete. Of the 1,418.75 m of main tunnel lining, 1,407.75 m is finished. Package 3 is the 220 kV transmission line from Damauli to Bharatpur, built by KEC International of India. It is 82 percent complete. Of its 94 towers, 83 have foundations and 80 are standing. For comparison, the dam package stood at 36 percent in December 2024, so most recent progress has come at the dam.

The engineering behind it

Tanahu is a storage project. Before it, Nepal had only two storage-type plants, Kulekhani I and II, according to the Post. Most other plants take water straight from the river, so their output falls when the river is low. A storage plant builds a high dam and holds water in a reservoir, then releases it when power is needed most. The Kathmandu Post reported in 2024 that Tanahu can generate for about six hours a day in the dry season.

A dam this tall is built in stages. First the river must be moved out of the way. Builders put up a temporary cofferdam upstream and send the river through diversion tunnels, leaving the riverbed dry for work. Then the main dam rises in layers of concrete. In general, large concrete pours produce heat as cement sets, so the work is planned in blocks and lifts to control cracking. The monthly figure of 33,681 cubic metres is how such work is measured and scheduled.

The water leaves the reservoir through an intake and a tunnel to an underground powerhouse. Fiscal Nepal reported an intake shaft 46.88 m high and 14.3 m in diameter. Lining a tunnel with concrete makes its surface smooth, which reduces friction loss, and protects the rock from erosion by fast water. Turbines, generators, inlet valves and transformers were being installed, according to the August report.

The power then needs a way out. The 220 kV double-circuit line to Bharatpur connects the plant to the grid. Its towers need forest clearance, which the Division Forest Offices in Chitwan and Tanahun have given. A plant finished before its line has nowhere to send its power. The Post put the line at 74 percent in December 2024, so it has gained only eight points in almost two years.

What it means in Nepal

The Post reported that Tanahu would be Nepal's third storage-type project, after Kulekhani I and II. Its expected average generation is 587.7 gigawatt-hours (GWh) a year for the first ten years and 489.9 GWh from the eleventh year. Storage plants matter because they can supply power in winter evenings, when run-of-river plants produce the least.

The project's cost is about $505 million, including the transmission line, rural electrification and interest during construction. The Asian Development Bank (ADB), the Japan International Cooperation Agency (JICA), the European Investment Bank, the Government of Nepal and the NEA are paying for it. Fiscal Nepal reported that an ADB delegation visited in July 2026 and was said to rate progress as satisfactory.

The schedule has slipped. In December 2024 the Post gave a completion target of May 2026, and the project is still at 78 percent in October. Downstream, Tanahu Hydropower Limited is preparing the 126 MW Lower Seti project, which would use the regulated flow from Tanahu. Fiscal Nepal said its environmental impact assessment has been sent to the forest and environment ministry, and exploratory tunnel work is under way.

The project also builds local power supply. The Post reported in 2024 that it had built two 33/11 kV substations, in Ghiring and Bandipur rural municipalities, with a 33 kV line to feed them. It also installed distribution transformers and 11 kV lines across Tanahun district. By then, 63 community projects in education, health, drinking water, roads and river protection were complete in the affected area.