The development of the much awaited Upper Karnali Hydropower Project has moved a step forward with its Indian developer signing a memorandum of understanding (MoU) with the Forest Department to clear trees at the project site.

The accord between the project builder GMR Upper Karnali Hydropower and the department has removed a longstanding obstacle preventing the construction of the 900 MW plant located in western Nepal.

On August 14, the Cabinet had directed the Forest Ministry to grant forest clearance to the Indian developers of the Upper Karnali and Arun 3 hydropower projects without further delay. 

As per the instruction, the Forest Ministry has to provide forest land to the Indian developers by charging a lease fee determined by the ministry. Accordingly, SJVN Arun-3 Power Development Company, the developer of the 900 MW Arun 3, signed an MoU with the Forest Department on August 23. The company is currently cutting down trees at the project site.  

However, it took around two months longer for GMR Upper Karnali to sign a similar MoU with the department. The Indian company will now sign a separate agreement with the district forest office mentioning the details and the procedures that it has to follow while clearing the forest. 

“After signing the agreement with the district office, we will form a special taskforce and start marking the trees to be cut down,” said a source close to the Indian company. “We will then cut the trees and transfer the timber to the district forest office. We will probably start clearing the forest in November.” 

GMR Upper Karnali has said that it will take around eight to nine months to clear the forest land required for the project. “As of now, we have received clearance for 235 hectares of forest land and we still need clearance for another 17.72 hectares,” said the company source. “There will be no delays from our side.” 

According to the guidelines on use of forest land, project developers have to plant two trees for every tree that is cut down and nurture the saplings for a period of five years in an area arranged by the Forest Department. However, for forest land which is used to build permanent structures like dam, powerhouse and office buildings, the developers have to provide replacement land or pay cash as per the rate determined by the Forest Ministry. 

The Arun 3 and Upper Karnali projects have a capacity of 900 MW each, and are located in eastern and western Nepal respectively. The power generated by the projects will be exported to India. 

According to the project development agreement signed by the government with the Indian developer of Arun 3, Nepal will get 21.9 percent of the electricity generated free of cost. Likewise, as per the deal with the developer of Upper Karnali, Nepal will get 12 percent of the project’s energy and 27 percent of the stock free of cost.