Achieving Indigenous consent for hydropower in Nepal

7 May 2020

In Nepal, the Tamang Indigenous People gave their free, prior and informed consent to a new 216 megawatt run-of-river project.

The River Trishuli flows down the steep Himalayas and enters Nepal with such force and speed that it was named after the trident of Lord Shiva, the most powerful of Hindu gods. Legend has it he drove his trident into the ground to create the source of the sacred river.    

Tamang people consecrating FPIC agreements  - credit Gregory Guldin and NEFIN

The river’s immense hydropower potential has for long been recognised, but to date has remained untapped. This year the Nepal Water and Energy Development Company (NWEDC) however aims to begin construction on a 216 megawatt (MW) run-of-river project, the Upper Trishuli-1 (UT-1).

Providing electricity for up to nine million people, the hydropower station is central to Nepal meeting its growing energy demands. The project was approved after successfully consulting with affected Indigenous Peoples and gaining their Free, Prior and Informed Consent (FPIC).

FPIC – ‘a give and take tool’

FPIC is a principle recognised in the UN Declaration on the Rights of Indigenous Peoples and is a condition of investment performance standards issued by the World Bank and International Finance Corporation (IFC).    

Adibasi Janajati Advisory Council (translates to Indigenous Peoples Advisory Council) - credit Gregory Guldin and NEFIN

The US$453 million UT-1 project in Rasuwa district has implications for the area’s Indigenous Peoples, most of whom belong to the Tamang community. The project will affect almost 80 hectares of land.

One of the project’s lenders, IFC, employed Greg Guldin, an expert from Cross-Cultural Consulting Services to facilitate the process of achieving FPIC with the affected Indigenous People alongside Phurpa Tamang, an Indigenous People’s advocate and a project-affected person who was appointed by NWEDC.

According to Phurpa, the Tamang people have a deep connection to the Trishuli River and cannot be separated from it for religious, spiritual and cultural reasons. “When a project is in operation, our water, forest and land will be disrupted or lost,” he says. “But this can be mitigated through FPIC, a give-and-take tool for Indigenous Peoples by which we can make compromises with project developers and co-plan our future.”

Good faith negotiations

Under the community consultation process that was implemented, the Adibasi Janajati Advisory Council (AJAC) was created to support decision-making, consisting of 85 representatives from 10 villages.

CEO receives consecrated [FPIC] Consent Statement - credit Gregory Guldin and NEFIN

“The FPIC process required by the international financial institutions was initially met with a lot of scepticism by critics, who feared failure and said written and signed consent was nearly impossible,” said Greg. “But it was achieved in six months.”

The FPIC process was accomplished through good faith negotiations between the Indigenous Peoples organisations, the company’s management, and the project’s lenders, Greg says. “The more engaged the Indigenous Peoples felt, the less likely there were to be misunderstandings and conflicts.”
NWEDC went on to receive the signed consent of the AJAC from its chairman, a former critic of the project, on 2 November 2018.

The UT-1 project will deliver a benefits package for local communities including new infrastructure, such as roads, schools and health services. The local Tamang will also be offered share options, allowing them to become equity shareholders in the project.

“UT-1 was started 12 years ago, but there were no signs of success and few local Tamang supported it.” Phurpa added. “With FPIC, a new door has opened for both the project and the Tamang community to achieve a ‘win-win’.”

Read more about Indigenous Peoples and FPIC.

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