Date: 2025-11-26

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 Roads & Infrastructure

• Under the MCA-Nepal (part of Millennium Challenge Corporation Nepal Compact), construction began on a new 18-kilometre transmission-line and the New Butwal Substation in Sunawal, Nawalparasi (Bardaghat Susta West). This marks a major addition to Nepal’s power-grid infrastructure.
• In the western hills — under the Madan Bhandari Highway project — the road project linking Simaltari–Sautamare–Machhi in Gulmi remains stalled. Contract expired last July but work is only 26% complete.
• Meanwhile, several multi-year infrastructure projects under the jurisdiction of Bagmati Provincial Government are lagging in progress; many remain incomplete or non-operational even in the third year of the government’s second term.

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⚡ Hydropower & Energy

• The government has prepared financing modalities for two of Nepal’s largest upcoming hydropower projects: the 1,200 MW Budhi Gandaki Hydropower Project and the 1,063 MW Upper Arun Hydropower Project. The plan proposes domestic funding through a mix of public equity, energy bonds, and infrastructure-tax revenues — reducing reliance on foreign funding.
• Due to uncertainty over international funding (from the World Bank), the government has decided to mobilize local banks, financial institutions, and diaspora/Nepali investors for the Upper Arun Project.
• On a different energy front — electrification efforts continue: in remote areas of Baitadi District, the power supply now reaches 27,091 households after recently connecting 7,000 more homes. That leaves about 22,000 households still to be connected.

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 Construction Industry & Regional Development

• The slow progress of multi-year projects in Bagmati Province points to systemic delays in planning and execution — a concern for contractors, investors, and local residents expecting infrastructure benefits.
• In contrast, the start of the transmission-line and substation project in Nawalparasi reflects increased pace in energy-infrastructure work, which may result in higher demand for civil-engineering materials, skilled labor, and associated industries.

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Government & Policy Updates

• The financing model proposed for Budhi Gandaki and Upper Arun hydropower projects — using public equity, energy bonds and infrastructure tax revenues — indicates a shift toward domestic funding and self-reliance. This could reshape Nepal’s hydropower financing strategies in coming years.
• The stalled highway projects and lagging provincial infrastructure highlight ongoing challenges in project management and accountability — issues likely to draw public and media attention.

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 What to Watch Next

• Whether financing for Budhi Gandaki and Upper Arun gets final approval, and how quickly mobilization begins.
• If stalled road projects under Madan Bhandari Highway and Bagmati-provincial initiatives get revived or terminated.
• The effect of ongoing infrastructure works (like the Nawalparasi transmission line) on local economies — jobs, material demand, real-estate interest near project corridors.
• Continued rural electrification efforts: monitoring how many of the remaining households in districts like Baitadi get access to power in the coming months.

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