ADB and Hydropower Project in Nepal

The Project is situated on Seti river of Vyas municipality near Damauli, the district headquarter of Tanahun (150 km west from capital city Kathmandu). Eight Village Development Committee (VDCs) and Vyas municipality of Tanahun district are directly affected by the project.

According to Environment Impact Assessment (EIA) Addendum, 2012, total 758 households will be affected. Among them, 86 household will be completely displaced from their ancestral land. The project will contribute to loss 660 metric ton crop which will raise the issue of food security.

Table 1: Summary of the main features of the reservoir, dam and transmission line

Source: NEA: project summary 2011(Pamphlet Nepali Version)

Table 2: Affected VDCs and Municipality

Source: THP, EIA, 2009

The total cost of THP is estimated at around 505 million dollar (ADB, 2013). Along with Asian Development Bank (ADB), there are other partners in THP who have financial investments in this project. One of the major funding partners is Japan International Cooperation Agency (JICA) and the remaining partners are European Investment Bank (EIB) and Abu Dabi Fund for Development Fund (ADFD). Following table shows the investments of different financiers of this project.

Table 3: Financing Plan

Source: (ADB, 2013)

The executing agencies are Nepal Electricity Authority (NEA) and Tanahu Hydropower Limited (THL). As described in the project manual of ADB, THL will be the executing agency for the hydropower plant and all associated works where as NEA will be the executing agency for the transmission lines and the rural electrification program. According to the report and recommendation of the president to the board of directors of ADB, it is said that ADB will facilitate throughout the procurement process including bid evaluation, contract negotiations and contract payment. In addition and along with ADFD and EIB will fund on civil works where as JICA will find all the powerhouse facilities. Furthermore, the same report says ADB will fund on its own or in conjugation with the government, the transmission lines, the community development, rural electrification programs and portion of land acquisition and settlement costs.

ADB is an active player in this project. Supervision, procurement and assigning of experts will be taken care by ADB. ADB has expected that the impact will be expanded access to sustainable energy in Nepal where the outcome will be increased efficiency and supply of reliable hydropower energy. The project outputs mentioned in the report are as follows:

 A 140 MW hydropower plant and related transmission system 37 km, 220 Kv
 Rural electrification covering 17,636 households
 Community development programme in the project area
 NEA restructuring
 Other sector reforms
Equity sale scheme for hydropower development
 Technical assistance for achieving project outputs

The special feature mentioned for THP is that all the policies of ADB along with the other funding partners will be applied in the execution of this project.

Impact of the project

Tanahu Seti is a storage dam project and the reservoir will submerge land, community forest, communities, public structures and cremation sites ect. Dam of this project will also regulate the river flow downstream. Thus, it is seen that the project will have following main impacts. This study has mainly focused on environmental and social impacts.

Land Acquisition

According to the EIA addendum 2012 prepared by NEA and THL, the total land required by the project is 828ha. Out of this, project implementation will have to acquire 112 hector and leasing of 19 hector of private land (THL and NEA, 2012). There is no mentioning of landless people who are living there from many generations without land certificates. It is found that lands in Vyas Municipality and Kahun Shivapur have already been acquired by giving compensation in cash before 2014. Project had distributed Rs 156.8 million to the landowners of the affected area immediately after the land compensation distribution was started in mid-February 2017. The government has allocated a total of Rs 420 million for land compensation purposes of the project within in 2017 fiscal year.

There are people and community school (Dipak Community Secondary School has occupied 216 ropani land without land-certificate) who are living there from many generations however they do not have land certificates. According to Land Acquisition Act, 1977 of Nepal, they are not entitled to get compensation. As one of the locals said in Damauli, their land (Darai: marginalized community) was taken for establishing District headquarter and was paid cash compensation as well. But Daraicommunity had no idea to manage those cash and did not have wisdom to buy lands for survival. Finally they spend all money and they are now landless around Damauli.

Public Resources and Infrastructure

According to EIA addendum, 2012 prepared by NEA and THL, it is found that suspension bridges, source of drinking water, access roads, foot trails, temples, and cremation sites will be completely destroyed by the project. In addition, it is found from the EIA 2012, this project will have pressure on public resources due to relocation of the affected households. It is already seen that due to tunneling work, the water supply is halted. The tunneling has disturbed the groundwater flow. Now they just have few hours’ access of water instead of 24 hours/7 days supply. It is already pointed in the EIA 2012 that the project will have major impacts on environment and livelihood of the project sites.

Involuntary Resettlement

According to the resettlement framework prepared by NEA and THL, about 758 households will be affected by this project. The framework further says that out of 758 households, 86 households will be physically displaced and relocated to their current village. The report further says that the affected households are rated as indigenous and vulnerable. In addition EIB’ report also confirms that the majority of affected people belongs to indigenous groups whose social and cultural ways if life may be compromised. According to the field visit, it is found at 19 families in Wantang Khola of Rishing Ranpokhari VDC, 7 families in Chhang VDC as well as in Beltar of Kahun Shivapur, Bhimad and Jamune VDCs.

Livelihood

This project will have major impact on the livelihoods of affected people. The means of livelihoods affected by the project is agriculture, fishing, fuel wood and fodder collection. Majhi, Bote, Danuwarand Darai are known as fishermen who are indigenous and marginalized, vulnerable group in Nepal. Fishermen depend entirely on rivers for their livelihoods. They cannot survive without river and most of them are landless. Fishing is their ancestral profession. Fodder, Cattle rearing, manure production and agriculture are interlinked. If one is affected the entire cycle is affected.

Environment

According to EIA addendum 2012, the project will have impacts on aquatic ecosystem, terrestrial ecosystem and the habitat of fauna and flora. It further says 400.3 hector forests will be lost which contains 162,000 trees, 18.7 ha of shrub land and 94.3 hector grassland. Mainly there is a concern of barrier on fish migration. There are altogether 36 species of fish, out of which six species came from long distance migration, six other came from short distance migration and the rest are the species found in the Seti river. The project will hamper the free migration of fish and loss of population. According to IUCN there is endangered and nearly threatened species.

Culture and religion

Most of the people are Hindus by religion however there are other religion such as Buddhist and Islam as well. The cremation sites and the temples which will be destroyed by the project would have impact on the people. The intervention by the project will bring new culture to the project sites and affected area which may affect the original culture practiced over there.

Conclusion

There is severe power crisis in Nepal majority people in countryside out of electricity access. Therefore Nepal cannot just say no to dams however it can avoid having bad dams. But local people are demanding adequate information, timely notification, inclusive and meaningful consultation and interaction regarding this project. They are still struggling to get whole project documents including full volume of EIA, IPPF, Resettlement Plan as well as ADB, EIB and JICA’s guidelines and safeguards in local language. Locals want guaranty of their livelihood and best cost for their lands and schemes to restore their livelihoods. They want electricity, employment in the project, regular income generation sources in the future to continue their livelihood.

ADB, JICA and EIB have policies and safeguards and their policies complement each other. They advocate reducing poverty and saving environment. It says all good things for people, environment and society. It says it is accountable or it will make borrower/client accountable to all its policy implementation. However it is not found in Tanahu Seti project case. Although the project has just gone to implementation phase, it can be concluded that in planning and preparation phase, many ADB’s policies have been violated regarding communication, consultation, participation and prior notification. This project needs to scrutinize from external bodies so as to make sure the affected people, environment and the society get what they should get.