Kathmandu, January 27

Wary of the delays in developing the West Seti Hydropower project located in the central part of Province 7 by the Chinese company — China Three Georges International (CTGI) — locals from the far-western region have urged the government to take forward the project in Upper Tamakoshi model.

Upper Tamakoshi is the largest capacity project under construction that is being developed utilising domestic resources.

The Chinese company had signed the memorandum of understanding to develop the West Seti Hydropower Project in February, 2012. However, it has been consuming more time to move ahead, which has pushed the fate of the project into uncertainty.

Organising a programme jointly with the Independent Power Producers’ Association Nepal (IPPAN) — the umbrella association of hydropower developers of the country — members of Far-west Development Stakeholders Forum expressed concerns of the snail-paced progress.

While Nepal Electricity Authority (NEA) and CTGI signed a joint venture agreement to take forward the project a few months back, a joint venture company is yet to be registered. NEA is a 25 per cent equity partner of the project. However, CTGI has raised few issues to move ahead.

According to Khadga Bahadur Bisht, former president of IPPAN and one of the members of the Far-west Development Stakeholders Forum, the Chinese company has put forth some conditions like if the NEA

fails to procure 25 per cent equity investment, the contract will be terminated.

The CTGI has sought bulk investment from NEA. However, NEA has said that it will inject the committed equity investment in intervals during the project construction period.

Likewise, CTGI has sought the best rate in power purchase agreement (PPA). However, it has not committed to develop the project as reservoir project, even though it could be cost-effective, according to experts.

“It might cost $2,000 per kilowatt to develop run-of-the-river projects, but the West Seti can be developed as storage project at that cost.”

Likewise, the CTGI has put a condition to capitalise its investment during the study period. The company has carried out the feasibility study of the project and proposed to bring down the capacity to 550 megawatts.

However, locals have suggested the government to chip in 25 per cent equity investment from NEA and rest from loans and also ensure 10 to 15 per cent share to the locals. Locals from the far-west have said that they have exploited negligible — 8.5-megawatt Nau Gadh Hydropower and 30-megawatt Chameliya HEP — till date despite having potential of 18,149 megawatts of electricity in Province 7.

Potential of hydro electricity generation

Province 1           12,953 MW

Province 2           200 MW

Province 3           12,636 MW

Province 4           10,228 MW

Province 5           14,030 MW

Province 6           11,803 MW

Province 7           18,149 MW

Source: IPPAN