Kathmandu, March 9
The government has decided to form a separate committee to study the problems that have arisen in the development process of West Seti hydropower project, including the recent concern related to bankability shown by the project developer.
The 29th meeting of the Investment Board Nepal (IBN) that was convened under the chairmanship of Prime Minister KP Sharma Oli today, decided to form a committee led by a secretary at the Office of the Prime Minister and Council of Ministers (OPMCM) to look into all the concerns of the 750-megawatt hydel project and suggest IBN regarding a possible ‘way forward’.
This decision of the government has come after China Three Gorges Corporation (CTGC) — developer of the West Seti hydropower project — recently put forth some conditions related to bankability of project based on current tariff policy of NEA.
During a recent meeting with Nepal Electricity Authority (NEA), officials of CTGC had requested the power utility for the capitalisation of earlier investment in the project cost (during study phase) and that NEA and CTGC should share the cost at 25 and 75 per cent ratio thereafter.
Moreover, CTGC has also asked NEA to ensure 17 per cent rate of return citing that the authority will also have to incur losses as it will have 25 per cent stake in the company.
The yet-to-be-formed committee of the government will have to submit its study report and suggestions regarding issues related to the West Seti hydel project to IBN within one month of the committee being formed. Along with a secretary from OPMCM, the committee will comprise representatives from the Ministry of Energy (MoE), Ministry of Finance (MoF), IBN and CTGC.
Meanwhile, the IBN meeting has also authorised the chief executive officer of IBN to issue electricity generation licence to Satluj Jal Vidyut Nigam Ltd (SJVNL) — the developer of the 900-megawatt Arun III hydroelectric project — after all legal procedures have been fulfilled.
On the occasion, Prime Minister Oli urged all state entities and government officials to function properly and accomplish their duties promptly and responsibly so that the nation can achieve planned development targets on time.
A version of this article appears in print on March 10, 2018 of The Himalayan Times.