Likhu Khola 'A

29.04 MW · operating · on the Likhu Khola · in Solukhumbu district. The smallest plant in the Likhu Cascade (213.44 MW combined across 4 plants) and the first MV Dugar project to commission.

Summary

Likhu Khola A is a 29.04 MW operating run-of-river hydropower project on the Likhu Khola in Solukhumbu district. It is the smallest plant in the Likhu Cascade and the first MV Dugar–Mogha Energy project to commission, in February 2022. The page tracks it as a cascade-financial benchmark with a two-tier PPA structure, using the current CARE Nepal credit-rating source set.

Specifications

Sources

• Likhu Cascade Research Compilation

Specifications (CARE Nepal / DoED data)

The Finishing Line — First to Commission

Likhu Khola A was the first MV Dugar project to reach the finish line, commissioning on February 8, 2022 — nearly 18 months before Likhu -2 (July 2023) and over two years before Likhu -1 (April 2024). For a conglomerate simultaneously developing three generation assets in the same river basin, getting the smallest project operational first was strategically essential: it established the developer's creditworthiness with lenders, demonstrated construction capability to the regulator, and generated early cash flow to support the larger builds.

At NPR 5,996 million (~NPR 206M/MW), Likhu Khola A's capital cost sits in line with Nepal's post-2015 private IPP benchmark. The 75:25 debt-equity ratio is lower than the cascade's other Dugar-controlled plants (Likhu -1 at 80:20, Likhu -2 at 78:22), reflecting the conservative leverage typical of first-mover projects in an unproven basin.

The MV Dugar FDI Model

Likhu Khola A shares the cascade's defining equity architecture: the MV Dugar Group (a Nepali conglomerate with interests in banking, insurance, automotive trading, and infrastructure) paired with Mogha Energy DMCC, a UAE-based investment firm. Mogha Energy holds a confirmed ~7% institutional promoter stake alongside Dugar family majority holdings.

This FDI model — a domestic group clustering multiple projects under shared foreign capital through separate SPVs — is a departure from Nepal's traditional single-project domestic bank consortium structure. For the UAE investors, the cluster offers risk diversification: three projects (77 + 55 + 29 = 161 MW cumulative under Dugar control) share the same basin, corridor, and regulatory regime, but operate as legally distinct entities with independent PPAs and debt.

Butwal Power Company (BPC) holds no equity in Likhu Khola A. BPC's involvement in the Likhu basin is exclusively technical — its subsidiary HCEL provided engineering consultancy and construction supervision, generating consulting revenue, not generation revenue.

PPA Structure — Partial Curtailment Exposure

Likhu Khola A's PPA has a distinctive two-tier structure. Of the 29.04 MW installed capacity, only 24.2 MW (83.4%) is contracted on strict take-or-pay terms, yielding 135.68 GWh/year with no NEA curtailment risk. The remaining 4.84 MW (16.6%) was built targeting future uncontracted take-and-pay off-take, exposed to NEA dispatch discretion.

This contrasts with Likhu -1, where 80% is take-or-pay, and Likhu -2, where 75% is take-or-pay. Likhu Khola A sits between the two on curtailment protection: better than Likhu-2's 25% exposure, below Likhu-1's 20%.

Financial Performance

CARE Ratings Nepal reaffirmed the project's bank facilities at CARE-NP BBB- in March 2025, supported by:

• PBILDT margins averaging 82% to 91% — strong operating cash generation
• Improving debt coverage ratios as the project seasons past its commissioning ramp-up
• Revenue stability from the high take-or-pay share (83.4%)

The BBB- rating places Likhu Khola A in the same CARE tier as Likhu -2 (BBB- Is), above Likhu-4 (BB). The rating reflects the project's conservative leverage structure and diversified lending consortium (5 banks), mitigated by the single-corridor transmission risk shared by the entire cascade.

Cascade Position — Smallest, but Structurally Identical

At 29.04 MW, Likhu Khola A is dwarfed by Likhu -1 (77 MW), Likhu -2 (55 MW), and Likhu-4 (52.4 MW) in capacity terms. But it shares the cascade's structural vulnerabilities:

• Hydrological interdependence: as an upstream plant in the Likhu system, its tailwater discharge affects downstream operators. Emergency shutdowns or desilting operations at Likhu Khola A alter inflow parameters for lower cascade plants — a cascade externality that no standalone PPA accounts for.
• Single corridor dependency: all four cascade plants evacuate through the New Khimti substation into the Khimti–Dhalkebar 220 kV line. The same 100 MVA transformer that bottlenecked Likhu -2 at 60% PLF in FY 2023/24 constrained the entire cascade. The late-2023 upgrade to 300 MVA resolved the immediate crisis, but a single substation failure returns all four plants to stranded-generation status. See Buildability and Stranded Generation.

Limitations & Controversies

The current page is strongest on credit-rating and PPA-structure context from CARE Nepal disclosures. It does not independently verify final design parameters, construction-phase quality records, current operating performance month-by-month, or environmental/social compliance status beyond the existing source set. Hydrological interdependence with downstream cascade plants is noted but not quantified.

See also

• Likhu -1 — upstream 77 MW cascade leader with best PPA protection
• Likhu -2 — downstream 55 MW plant, stranded generation case study
• Likhu-4 — downstream 52.4 MW plant (non-Dugar developer)
• Likhu Cascade — cascade overview and corridor context
• Buildability — transmission planning failure as structural IPP risk
• Stranded Generation — the grid evacuation bottleneck problem
• Koshi Basin — basin context
• Khimti–Dhalkebar 220 kV Hydropower Corridor — the 220 kV backbone