Site Study: Economic Losses to  Kulekhani Hydroelectric Project due to Siltation in the Reservoir As part of RUPES Kulekani's first year activities, a study on the economic losses to the Kulekhani Hydroelectric project due to siltation in the reservoir has been completed. If you are interested in reading please click the link. We welcome your comments on this study.

Kulekhani (Makwanpur District)

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Kulekhani watershed is located in the Makwanpur district, approximately 50 km southwest of Kathmandu city. This watershed has a total area of 12,496 ha and covers 7 Village Development Committees (Palung, Daman, Bajrabarahi, Tistung Deurali, Markhu, Chitlang, and Fakhel). It consists of the Bisingkhel, Kitini, Kunchhal, Naliban, Palung, Simlang, Tasar, and Tubikhel sub-watersheds. Its altitude varies from 1400 to 2300 m. It had a total population of 43,003 in 2001. The majority of the inhabitants of this watershed are disadvantage ethnic groups and low caste people (Dalits). The incidence of poverty in Kulekhani Watershed is higher than the national average. There are two hydropower plants located downstream of this watershed. The major source od water for these hydropower plants is Kulekhani river and its tributaries that originate from this watershed. Kulekhani hydropower plants are the only reservoir-type hydropower plants in Nepal. A third hydropower plant is being proposed using the same source of water.  

Winrock international is currently undertaking an action research program that examines the social equity and environmental justice aspects of hydropower development in Nepal. This program is sensitizing different stakeholders concerned with hydropower development in Nepal on equity and justice issues, developing mechanisms for sharing benefits of hydropower plants with local communities, and reducing disproportionate adverse impacts of hydropower on certain social groups and areas. One major output of this program will be a series of research papers examining different aspects of benefit-cost sharing. The proposed Kulekhani watershed site is one of the hydropower sites being studied under this on-going initiative. Since Winrock is testing benefit-sharing mechanism between the hydropower developer and the affected communities in the Kulekhani watershed, this concept could be extended to the hydropower developer and the upper watershed communities under a RUPES framework as well. 

Since July, the Bagmati Integrated Watershed Management Programme (BIWMP) has worked in this area with support from the commission of European Communities. This program has already invested more than US$ 650,000 in this watershed. Outputs of this programs include: development of community forests and development infrastructures, introduction of improved agriculture and livestock practices, desalinization, irrigation development, improved access of people to basic social services, promotion of community-based organizations, etc. There are 68 community forestry users’ groups, 8 non-timber forest products groups, 67 income generation groups, and 7 cooperatives in this watershed. There are also youth groups and women groups. Tamang people, major inhabitants of this watershed, are among the poorest groups of population but well known in Nepal for their group solidarity. Level of social capital is high. 

The evolving policy environment of Nepal is increasingly becoming favorable for introducing RUPES type process. Nepal’s Local Self Governance Act (1999) requires that the central government share royalty earned from natural resources with the local communities. Nepal also has a policy of encouraging participation of local people in the management of local common property resources. As a consequence of this policy, more than 10,000 community forestry users groups have been formed in Nepal. The Forest Act (1993) empowers these forest users groups to sell forest products and use such income for forest and community development activities in their areas. The National Parks and Wildlife Conservation Act (1973) requires that 30 to 50 percent of income from protected areas be spent on communities in and around the protected areas.Community forestry groups in upland areas would be potential providers of environmental services in the Kulekhani watershed. Currently, the Nepal Electricity Authority (NEA) has two hydropower plants downstream of the watershed and could potentially purchase hydrological services. The environmental management unit of the NEA has already expressed interest in reducing sedimentation, enhancing dry season water availability, and enhancing the capacity of the hydropower plants within this watershed. Bundling environmental services, such as in ecotourism, biodiversity, or carbon sequestration, mig ht also be considered.  

While best practices from environmental services initiatives continue to be gathered worldwide, research is needed in terms of the Asian context specifically targeting upland communities. Initial projects are necessary to test and validate the issues, methods, and institutional approaches for implementing different environmental service transfer payments given the social, political, economic, and ecological peculiarities of upland areas. This proposal is asking for financial assistance for the development of environmental services in the Kulekhani watershed in Nepal to benefit poor upland communities.

The site has distinct topographical and demographic features. About 50 percent of targeted population is living below the poverty line. If it can be demonstrated that RUPES type mechanism can promote sustainable livelihood among these people, it will be a valuable experience as well. In particular, the experience of benefit sharing between hydropower developers and the upland communities to be tested in this site can be replicated in many other hydropower sites of the world.

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