Status: Proposed
Timeframe: 2026-34
Area: Dudhkoshi River across Okhaldhunga, Khotang and Solukhumbu Districts in Koshi Province, Nepal
AIIB Investment Amount: 200 million USD
Total Project Cost: 2.32 billion USD
Co-financier: Asia Development Bank 550 million USD, World Bank 200 million USD, EIB
500 million USD, OFID 100 million USD, SFD 100 million USD, GoN & NEA 670 million USD
E&S Category: Category A
Project details:
This project involves the construction of a 220-meter dam and two powerhouses, a 600 MW underground facility and a 70 MW ecological station, totaling 670 MW of capacity. The scope includes civil works for the headworks and underground complex, alongside the installation of all necessary hydromechanical and electro-mechanical equipment.
Project Concerns:
Resettlement
Impact due to land acquisition and involuntary resettlement. The project will affect approximately 3,300 households (conservative estimate 16.500 individuals). 1,245 of them (estimate 6225 individuals) are Indigenous Peoples. Physical and economic displacement of 290 households (estimate 1450 individuals) and 171 Indigenous Peoples households (estimate 855 individuals) requiring relocation.
Impacts will be made on various indigenous groups including the Majhis, a community living for centuries along the banks of Koshi river. Displacement poses an existential threat to the Majhi peoples cultural identity, communal traditions, and river-based life. Women, in particular, face severe risks, including the loss of economic autonomy, social marginalization and increased vulnerability to gender-based violence and patriarchal suppression.
Environmental
The construction will result in flooding of forest and agricultural lands with potential risks of affecting biodiversity on land, in water and in the air.
The project lacks compensation for downstream communities and poses a risk of dam failure due to Nepal’s high seismic activity in Himalayan region.
CSO reports: Report from Coalition for Human Rights in Development (2025)
Organization monitoring: Coalition for Human Rights in Development
Further information: AIIB-Page
Last update: 26.03.2026
