Kathmandu, May 9

The government has seized 31 ropanis of land acquired by Kabeli ‘A’ Hydropower Project in eastern Nepal.

The project has acquired more land than the permissible land ceiling for the hydropower project, according to Krishna Devkota, secretary of the Ministry of Land Reform and Management (MoLRM). As per the existing rule, hydropower projects are allowed to purchase only 75 ropanis of land.

Located in Panchthar and Taplejung districts, construction of the 37.6-megawatt Kabeli Hydropower Project is underway. The project was barred from taking more land on lease as the project had already acquired more land than the permissible land ceiling. However, after the government has seized 31 ropanis of land, the project can now take the remaining required land on lease, as per Devkota.

The project is mulling over taking 400 ropanis of land on lease, as per the developer.

Though hydropower developers have long been seeking relaxation in the land ceiling provision for hydropower projects, the government has not reviewed the land ceiling policy for hydel projects.

The Kabeli Hydropower project, being developed by the Kabeli Energy Ltd (KEL), is jointly promoted by Butwal Power Company Ltd along with Gurans Energy Ltd. The World Bank Group has financed 40 per cent of the project and 20 per cent is being financed by the promoters as equity. The International Finance Corporation, member of the World Bank Group that works for private sector development, has signed an agreement to lend $38.6 million to the project. Similarly, the World Bank is funding an additional $40 million in the project through Hydropower Investment Development Company Ltd.

The government has awarded the project to KEL under build own operate and transfer (BOOT) model with 35 years of generation licence. The project development agreement (PDA) to this effect was signed on January 31, 2010, and its amendment was signed in 2013. Following the PDA in 2010, survey licence was awarded to KEL to update feasibility study and carry out Initial Environmental Evaluation and Environmental and Social Impact Assessment.

The Kabeli ‘A’ Hydropower project is expected to be completed by 2020.