Likhu-4

52.4 MW · operating · on the Likhu Khola · in Ramechhap district. Originally designed as a 120 MW export-oriented project, completely redesigned and downscaled after a cross-border transmission dispute. Part of the Likhu Cascade (213 MW combined).

Summary

Likhu-4 is a 52.4 MW operating run-of-river hydropower project on the Likhu Khola in Ramechhap district. It was originally designed as a 120 MW export-oriented plant and was completely redesigned and downscaled after a cross-border transmission wheeling-charge dispute. The page tracks it as a regulatory case study and stranded-generation recovery example using the current CARE Nepal and JICA source set.

Specifications

Sources

• Likhu Cascade Research Compilation
• JICA IPSDP Final Report Annexes (Vol. 2)

Specifications (CARE Nepal / DoED data)

From Export Megaproject to Domestic Afterthought — A Regulatory Case Study

Likhu-4 was originally conceived as a 120 MW export-oriented hydropower project, intended to wheel power directly to India across the Dhalkebar– Muzaffarpur cross-border interconnector. A dispute over cross-border transmission wheeling charges — the tariff India would charge for conveying Nepali-generated power across its grid to Indian buyers — caused Green Ventures Ltd (GVL) to abandon the export model entirely.

The project was completely redesigned and downscaled to 52.4 MW to cater exclusively to the domestic grid via a standard PPA with NEA. This represents a 57% capacity reduction from original design — a regulatory-risk write-down that no developer voluntarily accepts unless the alternative (persisting with the export model) was financially non-viable.

The Likhu-4 redesign is Nepal's clearest documented example of cross-border transmission policy directly determining project scale. The wheeling dispute with India did not kill the project — a 52.4 MW plant was still viable. But it killed two-thirds of it. Every other proposed export project in Nepal's pipeline (Upper Karnali, West Seti, Arun-3 free-power component, 28,500 MW target with 15,000 MW for export) faces the same wheeling charge risk, and Likhu-4 is the only completed project that has already absorbed it. See Buildability and Stranded Generation.

The Desanding Basin Collapse — Commissioning Catastrophe

In May 2021, on the eve of production testing, a wall of Likhu-4's desanding basin suffered a catastrophic structural collapse. The developer publicly blamed the Indian civil contractor, SSNR Projects, alleging construction defects.

A desanding basin failure at a RoR plant on a Himalayan sediment-loaded river is among the most consequential possible civil-engineering failures. The basin is the first line of defence protecting the headrace tunnel and turbines from abrasive sediment. A structural collapse on the eve of commissioning meant the plant could not operate safely — sediment-laden water entering the headrace would destroy the Francis turbine runners within weeks.

The incident delayed full commissioning and required emergency repairs. The event remains one of Nepal's best-documented examples of how construction-phase quality failures at the contractor interface convert directly into revenue loss — and how the limited-recourse SPV structure concentrates that loss on equity while debt continues to capitalise interest. The plant eventually commissioned in November 2021, but the delayed revenue and repair costs pushed GVL's capital structure deeper into leverage territory.

Financial Position — Constrained by Legacy Costs

Green Ventures currently carries a CARE-NP BB rating — two notches below investment grade and below both Likhu-2 (BBB-) and Likhu-1 (BB+). The rating is constrained by:

1. High capital costs — the redesign from 120 MW to 52.4 MW did not fully recapture sunk engineering and licensing expenditure from the export-design phase
2. Commissioning delay — the six-month delay from the desanding basin collapse meant six months of capitalized interest without revenue
3. Independent developer structure — unlike the Dugar-controlled plants (Likhu-1, Likhu-2, Likhu Khola A) which benefit from shared management and cross-SPV expertise, GVL operates as a standalone entity

The BB rating, while below the cascade average, is not a default warning — it reflects the margin pressure of a project that absorbed extraordinary regulatory and construction-phase costs before generating a single kWh.

Unlike the Dugar-controlled cascade plants, Likhu-4 has no UAE FDI component. The equity is held by Triveni Group (Nepal) and Bhilwara Energy (India) — making Likhu-4 the only Likhu cascade plant with Indian equity exposure. Indian EPC contractor failures (SSNR) combined with Indian policy disputes (wheeling charges) affecting an Indian-invested project is a concentration pattern that would concern any project finance credit committee.

Transmission — Same Corridor, Different Story

Like the rest of the cascade, Likhu-4 evacuates through New Khimti. Following the late-2023 200 MVA transformer upgrade, Likhu-4 was among the first cascade plants to receive CEA export approval for Dhalkebar–Muzaffarpur wheeling into the Indian day-ahead market — a remarkable reversal for a project that abandoned export at the design stage. The transmission infrastructure that did not exist when the original 120 MW export model was conceived now exists, and Likhu-4 benefits from it at 52.4 MW.

This is not a vindication of the Indian wheeling-charge regime. It is evidence that cross-border transmission policy evolves faster than a RoR hydro project can be redesigned and built. A project conceived for one regulatory environment commissions into a different one. Likhu-4 is the case study.

Limitations & Controversies

The current page is strongest on regulatory-history and credit-rating context. It does not independently verify the desanding basin failure root cause, contractor liability adjudication, current month-by-month operating performance, or environmental/social compliance status beyond the existing source set. The redesign from 120 MW to 52.4 MW means some original-design data no longer reflects the built asset.

See also

• Buildability — regulatory risk as a design-determining constraint
• Stranded Generation — when the grid cannot receive what the plant generates
• Q-Design Discharge — Likhu-4's generation data in context
• Koshi Basin — basin context for the Likhu Khola system
• Khimti–Dhalkebar 220 kV Hydropower Corridor — the 220 kV backbone the cascade depends on
• Arun 3 — the India-developed export archetype Likhu-4's original design was modelled on