Findings of Study


Nalsyau Gad River is one of the major tributaries of Thuli Bheri River and the River and the river system of Karnali River Basin. The main source of Nasyau Gad River is the Chhyakhur Lek. The catchments area of Nalsyau Gad River consists of mountain range having the altitudes from El. 4142 to El.4780. These are the major source of snow melt run off on the basin. The total area of Nalsyau Gad River basin up to intake site is 571.5 km², in which, about 50 km² is covered by snow. Glacier lakes are not identified in this basin. The river flows almost north to south. The detail break down of catchments area is shown in Table 1.

Table 1: Catchment Characteristic

Area (km²) Nalsyau Gad Dam Site P/H
Total Area 571.5 622
Area Below 500 m 571.5 622
Area Below 300 m 521.5 573

The average precipitation of the catchments area is found to be 1718.69 mm with instantaneous wind speed recommend to be 120 km/hr. The long term average annual flow and the long–term average monthly flows from January to December were computed from regional analysis regression. The long term mean monthly flows of the river is shown in Table 2.

Table 2: Monthly Flow at Dam Site

Month Flow (Cumecs)
Jan 7.53
Feb 6.25
Mar 5.84
Apr 6.36
May 8.87
Jun 26.77
Jul 75.58
Aug 89.30
Sep 68.62
Oct 31.64
Nov 15.34
Dec 10.03
Mean 29.35

Flood analysis were carried out using frequency analysis based on flood data of Mari Khola at DHM Station 330 as well as regional frequency analysis based on the regression equation for the ungauged sites. As examination of the record and plot of the frequency distribution showed that Log- Person Type-III distribution provide the best estimates for regional flood analysis. Recommended flood for different return periods for the design is shown in Table 3.

The recommended Probable Maximum Flood (PMF) at the dam site is 4488 m³/s for the design of hydraulic structures whereas it is 4842 m³/s at the powerhouse site.

Table 3: Floods at different return period

Return period (Years) Dam site Flood m³/sec Powerhouse Site Flood on Bheri River m³/sec Powerhouse Site Flood on Nalsyau Gad m³/sec
5 452.23 1110 490.52
20 675.33 1637 731.68
50 838.60 2019 908.01
100 971.25 2316 1050.73
1000 1510.36 3526 1630.82
10000 2244.04 5192 2421.08
Estimated PMF 4488 10384 4842

The concentration (ppm) and its sediment load in to the reservoir are important parameters. Therefore, the project has measured discharge measurement as well as the suspended sediment load. The suspended sediment are measured at the powerhouse area. From measured sediment values on various date, the maximum daily concentration recorded is 9626 ppm for D-74 sampler.


Nalsyau Gad Hydroelectric Project belongs to Surkhet Group and Mid Land Group of lesser Himalayan Zone in Mid Western Nepal. In the project area the lesser Himalayan Mid Land Group is represented by dolomite, quartzite, shale and slate. The project area crosses three Formation of Mid land Group which is Galyang Formation, Syanjha Formation and Lakharpata Formation whereas Swat Formation and Malpani Formation belong to Surkhet Group of Mid Western Nepal (from Geological map of Mid Western Nepal prepaid by Department of mines and Geology). The main Boundary Thrust (MBT) is located at about 75 km south of project area and Main Central Thrust (MCT) is located at >100 km north of project area.

Field Investigation:
The field Investigation work carried out as mentioned below:

  • Regional Geological Investigation
  • Geological Mapping
  • Construction Material Survey by excavating 23 nos. of test pits the vicinity of the project area
  • Seismic Refraction survey consisting of 84 profiles measuring total length of 8165.00 meter
  • Core Drilling consisting 14 drill holes with total depth of 602 meter

Major findings of the geotechnical investigation are as followings

  • The headwork area is covered by dolomite rock overburden deposit composed of alluvium and colluviums. The thickness of deposit varies from 3 to 10 m in the right bank. In the left bank, the thickness of overburden varies from 2 to 15m. However, in the upslope side in both of the bank, the thickness is less than 3 m.
  • The bedrock present in the headwork area consists of mainly dolomite and thin bands of slate intercalated.
  • The thickness overburden deposit in the headrace tunnel alignment varies from 2m to more than 15m. The overburden deposit consists of colluviums composed of soils, gravels and boulders mixtures.
  • The overburden deposit in surge tank area consists of colluvial soil and gravels. The boulders are small in size. The thickness of the overburden deposit is deposit about 10m; the underlying bedrock consists of jointed quartzite.
  • The surface Powerhouse site is characterized by presence of overburden materials consisting of unconsolidated alluvial deposit of boulder, cobble, gravel and sand mixture along the terrace. The fractured and weak black slate bedrock found at 29.75 m depth; which is not suitable for the Powerhouse foundation.
  • Fair to good quality core samples were obtained at both of the exploratory holes at the powerhouse site of Nalsyau Gad at its left bank slope. At both of the holes core samples show that, the bed rock is strong quartzite with minor shear planes and open joints. The rock properties are satisfactory and suitable for the excavation of underground Powerhouse Cavern and Access Tunnel.
  • The bedrock at underground Powerhouse site consists of slightly weathered strong blocky quartzite is considered suitable for powerhouse Cavern.

General Arrangement

The general arrangement of Nalsyau Gad Storage Hydroelectric Project comprises a rock fill dam with a gated spillway located just downstream of Udheri khola. The sloping intake proposed on the left bank of the Udheri Khola diverts design discharge to the underground powerhouse comprising of four vertical axis paltan turbines through a 8215m long headrace tunnel, a 962m long inclined shaft and a 90 m long high pressure tunnel. From the powerhouse water is discharged into the Nalsyau Gad River.

The main features of the project are as follows:

  • Headwork comprising a 200 m high 545m long rock fill dam with a gated spillway, side, spillway and a sloping intake and diversion arrangement.
  • Waterways consisting of the 8215 m long concrete lined headrace tunnel of diameter 5.7m, a surge shaft of diameter 4.2 and a 90 m long steel lined pressure tunnel of 3.9 m diameter.
  • A underground powerhouse equipped with four pelton turbines having an installed capacity of 410 MW(4×102.5 MW)
  • Four box culvert concrete conduit with inner dimension of 2.2 m ×4.1 m each as tailrace. Total length of the tailrace is 1280 meter out of which 937 meter is under ground.
  • A 112 km long,400 kV double circuit Bear conductor transmission line from the powerhouse to Kohalpur Sub-station.

Optimizational Studies

The site being located at the remote part of Nepal, Very sparse inhabitants are located in the reservoir area. Thus the limiting factor for the dam height is considered to be the technically possible rock filled dam height rather then the social- environmental limitation.

The maximum height of the dam is considered to be in the range of 200 m from the foundation. The river bed level at the proposed dam site being 1380 masl, the maximum dam crest level considered for the optimization study is 1575 masl for this utilization of the available discharge in the river. In this case the discharge utility factor will be unity.

The dead storage level corresponding to the 50 years sediment accumulation in the reservoir ranging from 1478.22 masl for Dam Crest Level (DCL) 1525 masl to 1479.28 masl for DCL 1575 masl. This gives the minimum operating level in a range of 1491.69 masl for 1525 DCL and 1498.01 for 1575 DCL.

Hence, considering the minimum draw down, the range for full supply levels for the optimization is taken from 1519.00 to 1569 masl. For the purpose of optimization of FSL, four levels 1519.0, 1534.0, 1549.0 and 1569.0 are considered.

Layout, design and sizing of major components were carried out for the four cases. Reservoir operations were done to estimate the installed capacity and the energy generation from the project. Bills of quantities were prepared and project cost for all the alternative were estimated. The details of the power and energy for all four alternatives are presented in Table 4

Table 4: Estimated Energy Generation for Different Full Supply Level

Full Supply Level (masl) Installed Capacity (MW) Dry Season Energy (GWh) Wet Season Energy (GWh) Annual Energy (GWh)
1519 256 416.0 694.0 1110
1536 326 517.0 730.0 1247
1549 404 587.0 795.0 1382
1569 536 788.0 677.0 1455

Economic as well as financial analysis was done for all the alternatives. Avoided cost method was used for economic analysis where as project is proposed to be developed by Nepal Electricity Authority (NEA) through the subsidiary loan agreement with Government of Nepal (GoN) using development loan or foreign grant. Local component of the project will be invested as equity.

The economic parameters estimated from the analysis are presented in Table 5. The Summary of the financial analysis are presented in Table 6

Table 5: Economic Parameters of Various cases

Option FSL in masl Net Present Value in 1000 US$ B/C Ratio EIRR %
1519 37,606.97 1.08 11.04
1536 122,508.02 1.23 13.16
1549 198,912.77 1.34 14.91
1569 358,023.15 1.52 17.79

Table 6 : Summary of the Financial Analysis (with respect to 16% Return on Equity)

Description FSL 1519 FSL 1536 FSL 1549 FSL 1569
Total Financial Cost of the project (Million Rs.); 72,024.54 79482.31 86,247.59 100,724.77
Total Equity Investment (Million Rs.) 19,372.13 21,418.84 23230.64 27,268.33
Total Debt Investment (Million Rs.) 52,652.41 58,063.47 63,016.95 73,456.44
Average Energy Cost as of Year 2018 (Rs. per kWh) 10.10 9.92 9.74 10.83

The result from the economical analysis shows that all the options are economically viable and the benefit pattern is superior with the increase of dam height till discharge utility factor is one. Hence it suggested that the full supply level may be increased as high as possible.

The financial analysis suggested that optimum full supply level would be 1546 masl. However, the average cost of the energy for the higher full supply level is still far more less than the thermal cost or the cost of load shedding. Further, with reference to the seismic conditions, limiting technology and worldwide practice, the maximum height of 200 meter from foundation for the rock fill dam is normal. Based on above factors it is decided to increase the full supply level to 1570 masl for the feasibility study of the project. This corresponds to the crest level of 1581.30 masl.

Reservior operation

Reservoir simulation and the estimation of installed capacity as well the estimation of energy generation from the project are based on the storage elevation curve of the reservoir area, minimum operating level based on the dead storage, full supply level, monthly flow of the river, evaporation, seepage, environmental release and the operation rule of the reservoir. The minimum operating level is estimate to be 149.00 masl where as maximum full supply level is estimated to be 1570.00 masl. The centre line of the peloton turbine are fixed at 872.00 masl . The reservoir will have the live volume of 296 million cubic meters.

The power and energy balance are estimate for 19 year starting from the year 2009- 2010 based on power and energy demand forecast, existing generation, existing import, probable import and the probable generation sequence of the candidate projects. For this purpose 19 ROR projects and 13 PROR project are assumed to be connected to the system at different year. The capacity deficits are assumed to be compensated by Storage projects where as the required operation hour are estimated from the required capacity of storage project and energy deficit. Estimated monthly operation duration of the storage project required for INPS is shown in Table 7 Below.

Table 7: Estimated Monthly Operation Duration for the storage project (Hrs/Day)

Items Shrawan (Jul-Aug) Bhadra (Aug-Sep) Ashwin (Sep-Oct) Kartik (Oct-Nov) Mansir (Nov-Dec) Poush (Dec-Jan) Magh (Jan-Feb) Falgun (Feb-Mar) Chaitra (Mar-Apr) Baisakh (Apr-May) Jestha (May-Jun) Asar (Jun-Jul)
Normal 2.0 2.0 2.0 3.0 5.0 11.0 13.0 12.0 9.0 5.0 2.0 2.0
10% Shedding (Limited use of storage Plant) 1.0 2.0 1.0 2.0 3.0 7.0 10.0 7.0 5.0 3.0 1.0 1.0
10% Sheding Maxmimum Use of storage Plant 2.0 2.0 2.0 3.0 6.0 14.0 14.0 12.0 6.0 2.0 2.0 2.0
Recommended 2.0 2.0 2.0 2.0 5.0 10.0 12.0 11.0 9.0 5.0 2.0 2.0

Based on the assumption made and the base data of the project, it is found that the installed capacity of the project would be 410 MV. It means, the project could generate 410 MV throughout the year for the designed duration specified in Table 7 generating 749.17 GWh of saleable annual energy. Apart from this it can generate additional 611.89 GWH of energy between Augusts to October. This additional energy is termed as spill energy as it is produced at the time when it could not be consumed in the INPS. With this spill energy the total energy that could be generated from the plant is 1404.06 GWh. Out of this total energy, the total regulated energy is 448.71 GWH which is 56.19% of the total useable energy. Total dry season energy that could be generated from the project is 643.17 GWh. Similarly, total wet season energy that could be generated from the project is 150.88 GWh. The spill energy generated from the project is 611.89. The plant factor of the project which is defined as ratio of actual useable generation and maximum theoretical generation for that installed capacity is 22.11%. The capacity factor (Ratio of total Energy and maximum theoretical generation) of the plant would be 39.15%.The discharge utility factor with respect to the useable generation is 53.83%. However, the maximum discharge utility factor would be as high as 98.09%.

The summary of the result of the result of the reservoir operation with energy generated is shown in below.

Table 8: Summary of Annual Energy Generation

Month Energy Generation (GWh) Reservoir Level (masl) Power Flow (m²/s
Useable Spill From Storage Beginning End Max Min
November 61.5 3.289 0.00 1570 1569.99 70.82 70.82
December 127.1 0.00 85.781 1569.99 1559.84 71.9 70.82
January 152.52 0.00 122.931 1559.84 1543.78 73.7 71.93
February 126.28 0.00 105.001 1543.78 1527.35 75.69 73.77
March 114.39 0.00 93.131 1527.35 1507.95 78.18 75.76
April 61.5 0.00 39.432 1507.95 1498.68 79.47 78.26
May 25.42 0.00 0.00 1498.68 1500.33 79.53 79.31
June 24.6 0.00 0.00 1500.33 1516 79.3 77.21
July 25.42 0.00 0.00 1516.57 1560 77.14 72.04
August 25.42 225.04 0.00 1560.11 1570 71.91 70.82
September 24.6 269.564 0.00 1570 1570 70.82 70.82
October 25.42 113.996 0.00 1570 1570 70.82 70.82

The analysis shows that, if the plant is operated as per the planned operation hours, the minimum water level in the reservoir will be 1498.68 masl which will be attained at the end of April. The reservoir will be filled to its full supply level by the end of August. Maximum power flow from the reservoir would be 79.53 cumecs in May where as minimum power flow would be 70.82 cumecs from August to November.

Project Cost

The estimated cost the Nalsyau Gad storage Hydroelectric Project is US $ 737.393 million. This cost corresponds to the base year July 2012. Out of this total cost this total cost the physical contingencies is US $56.658 million.

A project road of 25 km is required for the construction of Nalsyau Gad Storage Hydroelectric Project. Apart from this bridge of 200 m span either over Nalsyau Gad River or over Bheri River will be required on the main access to the project area. A total provision of US $ 9.9 million is made for the project road and the bridge. The total cost for the civil works including access road is estimated to be US $ 9.9 million is made for the project road and the bridge. The total cost for the civil works including access road is estimate to be US $ 438.906 million.

This amount 72 % of the total project base cost. Total amount of hydraulic steel structures such as trash racks, gates, including steel penstock for the project is US $ 30.955 million. The estimated cost for the turbines and generator with all accessories is US $ 114.819 million. A provision of US$ 48.623 million which is 8 % of the total project base cost has been made for engineering and management including the detailed engineering and supervision cost for Nalsyau Gad Storage Hydroelectric HEP. Total sums of US $ 12.156 million have been allocated for environmental, compensation and mitigation purposes. The summary of the cost is tabulated in table 9 below.

Item Description Cost in US $
1 Preliminary works and access road 69,00,000
2 Civil Work  
2.1 Dam 221,884316
2.2 Diversion facilities 637,248
2.3 Diversion tunnel Excavation 7,535,899
2.4 Cofferdams 2,081,221
2.5 Side Spillway 18,077,871
2.6 Gated Spillway and chute and energy dissipaters 33,104,603
2.7 Sloping Intake 5,582,960
2.8 Tunnel 46,197,683
2.9 Adit Tunnel 3,973,883
2.10 Surga Tank 4,554,179
2.11 Penstock (High Pressure Tunnel) 4,342,111
2.12 Powerhouse and Transformer cavern 5,811,467
2.13 Tailrace tunnel and canal 4,555,768
2.14 Access Tunnel to PH 9,470,819
2.15 Switchyard 1,198.694
3 Hydro mechanical 30,954,581
4 Electrical mechanical 114,819,461
6 Base cost 607,799,563
7 Engineering, Management (8% of base) 48,623,965
8 Resettlement and Environment 12,155,991
9 Owners Cost 2% of base cost 12,155,991
10 Total Project Cost 680,735,511
Physical Contingencies  
10% of civil works & Preliminary works(1,2.1,2.2,2.4-2,2.7,2.15) 35,246,691
15% of Underground Civil works (2.3,2.8-2.14) 12,966,271
5 % of Electromechanical Transmission (3-50 8,444,542
Total Contingency 56,657,505

Construction Planning

Prior to award of the main contract of the detailed engineering study, construction of access road, bridge rehabilitation and upgrading of existing roods and camp facilities are to be completed. Some activities in these tasks could be done in parallel. Hence that totals time during required for the completion of the above mentioned tasks is estimated to be 36 month. The detailed engineering study will require a period of 12 months. Tendering will required 5 months while mobilization will require 3 months. Construction of the access road, upgrading of existing road and camp facilities construction of the bridge and making arrangement for the construction power will require approximately 3 years and these activities can be undertaken as a separate contract. The camp facility will also be undertaken in six month under a separate contract from the main work .The critical path lies in the construction of road and arrangements for the power supply, construction of the diversion tunnel, the construction of the cofferdam and the construction of the main dam. The total constriction duration of the project from the start of the detailed design up to the commissioning of the units is a little over eight years. The actual construction of the project after the start of the mobilization of the civil works will require a period of little over six and half years.

All the preconstruction activities like tender document preparation, land acquisition and tendering which affects the tender award date could be considered as critical activities. After the award of the tender, diversion tunnel, construction of upstream coffer dam and construction of the main dam are the critical activities.

Project Evaluation

The base cost of the Project as of the year 2012 including physical contingencies is estimated to be 737.393 million US$. Out of this, the local component is 157.748 million US$ and foreign component is 579.645 million US$. The equivalent cost at an exchange rate of NRs. 87.0 per US Doller is estimated to be NRs. 64,153.2 million. The Project is proposed to be developed by Nepal Electricity Authority (NEA) through the subsidiary loan agreement with government of Nepal (GoN) using development loan or foreign grant. Local component of the project will be invested as equity. Results of the financial analysis is as follows

Total financial Cost of the Project 108,263.7 million NRs.
Equity Investment 26,655.7 million NRs.
Debt 81,608.1 million NRs.
Interest Rate 8%
Expected Return on Equity 14%
Average Energy Rate 9.11 NRs/kWh (2012 Price Level)
Debt Service Ratio 2.0 (in the first year of operation)
Financial Internal Rate of Return 8.9%
Benefit cost Ratio 1.15 (at 10% discount rate)
Pay Back Period 12.18 Years
Analysis Period 25 Years

The financial cost include taxes and duties of NRs. 6,335.6 million, price contingencies of NRs. 16,834.1 million and interest during construction of NRs. 20,940.8 million.

If the project cost is increased by 10 % the required average energy rate would increase to NRs. 10.01 per kWh where as if the benefit is decreased by 10%, the required average energy rate would increased to NRs. 10.12 per KWh. Similarly if spill energy rate is not saleable, the required average energy rate would be NRs.16.09 per kWh. All these energy rates correspond to 2012 price level.

Economic analysis is carried out using avoided cost method as well as long run marginal cost (LMRC) carried out in by Norconsult in 1998. In Avoided cost method, the project is compared with a equivalent thermal plant producing same power & energy as that by the hydro project. Project evaluation parameters for the 410 MW Nalsyau Gad scheme based on avoided cost method are as follows.

Project cost 721.62 MUS$
Annual Dry Season Energy 646.58 GWh (before loss and outages)
Economic Internal Rate Energy 21.88%
Benefit Cost Ratio 2.25 (at 10% discount rate)
Net Present Value 738.64 MUS$ (at 10% discount rate)
Specific Energy Cost for Hydro 16.31 US cent/kWh (at 10% discount rate)
Specific Energy Cost for Thermal 36.72 US cent/k Wh (at 10% Discount rate)

Economic analysis was also carried our using Long Run marginal Cost (LRMC) based on the study carried out by Norconsult in 1998. In this method the seasonal energy rates are estimated assuming escalation rate of 2.5 % per annum for 14 years. Project evaluation parameters based on LRMC are as follows.

Winter Season Energy Rate 12.72 US cent per kWh
Summer Season Energy Rate 3.82 US cent per kWh
Emission Benefit 0.598 US cent per kWh
Economic Internal Rate of Return 11.12 %
Benefit Cost Ratio 1.13 (at 10 % discount rate)
Net Present Value 76.57 MUS$ (at 10 % discount rate)

Above figures show that the generation from Nalsyau Gad Storage Project is much more costlier than the prevailing tariff. However, the project is economically attractive. Considering the effect of load shedding in the overall economics of the country and the estimated cost of load shedding, the project would be a big asset for the INPS. As the project is not attractive financially, the government has to make effort to promote this project.


As the project is a reservoir type the impact on the environment will be complex and a multi disciplinary team will be required to investigate, identify the major impacts and propose pragmatic environmental management plan during the EIA study. Presently, the arrangements have been made for the EIA of the project as well as the transmission line upto the Kohalpur S/S. The impacts, mitigation measures and the possible way outs will be studied.

Based on the desk study and literature review carried out so far major potential environmental impacts associated with Nalsyau Gad storage Hydroelectric Project are (i) relocation of approximately 175 household and market areas, (ii) loss of 270 ha of agricultural land, (iii) loss of river continuum because of the dam ; (iv) slope instabilities including shoreline erosion, (v) loss of 290 ha of forest resources, (vi) a river reach with strongly reduced flow, and (vii) daily water level at the fluctuations downstream of the power other impact are dewatering of approximately 8 km of river stretch with implication on aquatic habitats and biodiversity.

Conclusion and Recommendation


The project is technically viable. The financial analysis shows that the generation from the project is much more costly than the present tariff. But it is to be noted that the quality of energy /power generated by this project is comparable to power generated by thermal plant. Further, the analysis shows that the project is economically attractive. Considering the effect of load shedding in the overall economics of the country and the estimated cost of load shedding, the project would be a big asset for INPS. As the project is not attractive financially, the government has to make effort to promote this project.


Following are the recommendation of the feasibility study of this project:

  • Nalsyau Gad Storage Hydroelectric Project is financially as well as economically feasible. This project is much cheaper than alternative source which is thermal at present.
  • While promoting this project, the market for spill energy during wet season has to be explored. This would help to reduce the average energy cost of the useable energy significantly as about 43.5% of the total annual energy is generated during wet season.
  • The EIA study of the hydropower as well as transmission line has to be expedited in order to complete the feasibility study.
  • Detail design of access road connecting major structural site of the project is to be carried out.
  • Works regarding camp facilities have to be initiated as it has to be completed prior to the award of main contract.
  • Work regarding test adit at power house area has to be carried out to collect more geological information of the underground powerhouse.
  • Hydrological and sediment data collection are to be continued. To reconfirm the hydrological parameters of the project, it is recommended to outsource the hydrological analysis. Entire hydrological analysis is to be updated using new data.
  • Preparation for the upgrading feasibility study and detail engineering of the project from the international consult is to be initiated.
  • As it is recommended to development the project by NEA through subsidiary loan agreement with the GoN using development loan or foreign grants, the potential donors/investor has to be identified and process for the financial arrangement has to be initiated.
  • As the project is technically and economically viable, it is recommended for the implementation. For this, detailed engineering design of the project need to be carried out earliest possible.