West Seti Dam, Nepal

The West Seti River flows through northwestern Nepal. This region is rich in biodiversity and remains one of the least developed regions of the country. For 16 years the proposed West Seti Dam threatened the region's diverse natural resources and the communities that depend on them. In June 2011 the Government of Nepal decided to scrap the license of the Australian multinational, Snowy Mountain Engineering Corporation (SMEC), to build the 750-MW West Seti Hydropower project.

Funding for the 195 meter, 750 MW dam was initially offered by the China Exim Bank. An Environmental Impact Assessment (EIA) was also approved by the Asian Development Bank (ADB) for a private sector loan, despite the project's violations of the ADB Environmental Policy, Involuntary Resettlement Policy and Public Communication Policy, as well as recommendations by the World Commission on Dams. In 2010 a campaign by Kathmandu-based Water and Energy Users' Federation-Nepal (WAFED) forced the Asian Development Bank to pull out from the project for its failure to comply with these policies. Other funders included the Industrial and Commercial Bank and the Bank of China.

An estimated 2,322 hectares of land would have been acquired for the project and 678 hectares for the transmission line. This includes large expanses of cultivated land, forest, grassland, and shrubland--all crucial ecosystems for native flora and fauna and the human communities that depend on them. The dam would prevent migratory fish species from reaching upstream spawning grounds, forcing them to disappear from the upper Seti River and cutting off crucial upstream fisheries.

A total of about 1,575 households would be displaced by the project. 13,000 people would be impacted: 7,870 would be resettled outside the project area, and 1,200 would relocate locally. Most of the people threatened with relocation belong to the lower Hindu caste system and depend upon the natural resources and rich biodiversity of the region for their livelihoods. A report carried out in 2007 found several violations in the project's resettlement program, inadequate information disclosure and deception of the people's consent.

The benefits of the project were mostly proposed for India, with plans to export 90% of the electricity to India through a 230-kilometer transmission line.

For 16 years SMEC failed to attract and hold on to sufficient investment for the West Seti Dam. The project agreement was amended ten times and SMEC continued to request more time from the government, admitting that they had failed to convince investors to fund the dam. The government stalled the project in 2007, and eventually canceled the project in 2011.