Kulekhani III Hydroelectric project with an installed capacity of 14 MW (annual energy generation of 40.85 GWh) is a cascade scheme of Kulekhani storage project (Kulekhani I and Kulekhani II Hydroelectric project, generating 60 and 32 MW peaking power, respectively). It is designed to utilize the regulated flow of Kulekhani II Hydroelectric project and natural flow of Khani Khola for the generation of electricity. The project lies in Bhaise VDC of Makwanpur district in Narayani Zone. The project particularly the headwork’s site is located at about 40 km southwest from Kathmandu and about 10 km north from Hetauda city in Makwanpur. The headwork’s site is situated very close to Bhaise- Kulekhani Road while the powerhouse site is situated on the right bank of Rapti River in Sanutar village; Tribhuvan Rajpath (Hetauda – Kathmandu Highway) passes through the left bank of Rapti River and a bridge over Rapti River is recently constructed which will connect powerhouse site to the highway. The distance between headwork’s site and the powerhouse site is just over 4 km.

Nepal Electricity Authority (NEA), an undertaking of Government of Nepal (GON) is the Executing Agency of the project. KL III HEP was first identified in 1988. Since then at different times alternative studies are conducted for 14, 26, 38, 52 and 75 MW by JICA at first phase. Similarly, NEA also conducted alternative study 1997 NEA carried out feasibilities for 14, 16, 18 and 42 MW options. In 1996 study for 14 MW options. After all these alternative studies, 14 MW option is found technically and economically feasible and is considered for implementation. The total construction cost of the project is NRs 1.34 billion.