The river Varahi takes its birth at a height of 730 m in the Western Ghats at Hebbagilu, near Agumbe in Shimoga District. It joins the Arabian Sea near Kundapur. After a 25 Km initial run, this swift and powerful river falls 455 m in cascades to form the bellowing Kunchikal falls.

Varahi is Karnataka’s first underground powerhouse – a key milestone in the corporate history of KPCL.

Initially conceived as a surface power house at the blueprint stage, Varahi was later converted into an underground Powerhouse. The decision for the change-over was based on three key parameters : technical, economical and our concern for environment protection. Stage I of the Varahi Hydro Electric Project has a total installed capacity of 230 MW contributing 1100 MU annually. This consists of 2 x 115 MW Generating Units at Varahi underground Powerhouse and two 4.5 MW units in the power house at the Mani Dam site. Provision was made to add two more Units at this power house of similar capacity (115 MW) & the excavation works were completed during Stage I works only. Now the construction works of  units 3 & 4 each of 115 MW capacity is under progress. These units are scheduled to be commissioned during November 2008 .