KATHMANDU, Nov 15: The financial condition of the 111 MW Rasuwagadhi Hydropower Project is deteriorating as successive natural disasters and prolonged operational shutdowns continue to undermine the company's financial performance.
Rasuwagadhi Hydropower Company, the promoter, reported a net loss of Rs 415.7 million in the first quarter of the current fiscal year (FY 2026/27) after its power plant suffered extensive damage from a devastating flood in August.
According to the company's unaudited financial statements, the quarterly loss was lower than the Rs 653.4 million recorded during the corresponding period of the previous fiscal year. However, continued operational disruptions and mounting financial obligations have placed considerable pressure on its financial position.
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The company has a paid-up capital of Rs 6.84 billion, while its accumulated losses have reached Rs 2.87 billion, reducing its total equity to Rs 3.96 billion. As of mid-October, its long-term debt stood at Rs 13.80 billion, with an additional Rs 3.62 billion in short-term liabilities.
Located in Timure, Rasuwa, the project began commercial electricity generation on January 2, 2025. However, its operations were severely disrupted by a major flood on July 8, 2025, triggered by a glacial outburst in the Tibetan region that sent floodwaters through the Lhende and Bhotekoshi rivers.
The disaster damaged critical infrastructure, including equipment at the headworks, the Friendship Bridge, and the powerhouse near the Nepal-China border. After an extended shutdown, the company managed to resume full-capacity generation in mid-May 2026.
However, the recovery was short-lived. Another devastating flood on August 26, 2026, struck the project site, forcing the power plant to suspend operations once again. The company has remained unable to resume electricity generation since then.
The latest disaster caused extensive destruction, sweeping away the entire headworks structure, site office, residential buildings, construction materials, vehicles, and a concrete bridge. Electromechanical equipment inside the underground powerhouse was also destroyed, while two transmission line towers sustained damage.
The scale of the destruction has significantly increased the Rasuwagadhi Hydropower's reconstruction requirements. The initial estimate of the reconstruction cost was Rs 2.74 billion, which was subsequently revised upward to Rs 2.93 billion. However, the company has received only Rs 6.75 million as an advance payment from its insurer against the insurance claim.
Reconstruction efforts are further complicated by the loss of road connectivity to the project site, as floodwaters swept away concrete bridges along the access route. The company has stated that work is underway to construct a Bailey bridge to restore alternative access to the project area.
With the Rasuwagadhi Hydropower remaining offline, mounting debt obligations, substantial reconstruction costs, and delays in insurance compensation are adding to the financial challenges facing Rasuwagadhi Hydropower Company.
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