Nepal | September 28, 2020

Government starts discussion with donor agencies to raise investment


Himalayan News Service
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Kathmandu, May 16

The government has started discussions with development partners to raise investment for the 635-megawatt Dudhkoshi Reservoir Hydropower Project.

Authorities at the International Economic Cooperation Coordination Division of the Ministry of Finance and Nepal Electricity Authority (NEA) held a preliminary meeting with representatives of Asian Development Bank (ADB), European Investment Bank (EIB), Asian Infrastructure Investment Bank (AIIB) and Korean Exim Bank for the aforementioned purpose through a video conference on Friday.

During the discussion, Joint Secretary of the division, Shrikrishna Nepal, urged the international lenders to invest in the construction of the reservoir project.

Meanwhile, Kulman Ghising, managing director of NEA, briefed the international lenders about the current status of the project, estimated cost, investment structure, importance of the reservoir project and other issues.

Ghising informed that the banks have agreed to submit a concrete proposal for the investment structure through the Ministry of Finance. “ADB has said that it will invest up to $550 million, EIB up to $500 million, AIIB up to $300 million and ADB up to $300 million,” he said.

Meanwhile, Ghising informed that the Korean Exim Bank has said it will invest the entire amount required for any one of the hydromechanical, electromechanical or transmission line component.

The government had announced in its policy and programme for next fiscal year that it will prioritise and start the construction works of the Dudhkoshi project.

Minister for Energy, Water Resources and Irrigation, Barshaman Pun, who visited the project site last December, had said that Dudhkoshi would be promoted as a national pride project.

Likewise, it has been given first priority among the 10 best reservoir-based hydropower projects identified by the Japan International Cooperation Agency (JICA).

The estimated cost of the project is $1.53 billion (approximately Rs 160 billion) and the total cost, including construction and interest during the construction period is estimated to be around $2 billion.

ADB will lead the banks to invest through co-financing and the detailed design of the project has reached the final stage with the grant of ADB.

“Construction of reservoir-based projects should be started immediately to maintain the balance of daily and seasonal demand and supply of electricity and to export electricity to neighbouring countries that cannot be consumed within the country,” Ghising said.

The project will generate 3.44 billion units of energy annually.

Out of this, 1.35 billion units will be produced in winter and 2.84 billion units in the rainy season.

The generated electricity will be connected to the national transmission system through the proposed Sunkoshi-Dhalkebar 400 KV transmission line.

The project will affect 3,876 hectares of land in Khotang, Okhaldhunga and Solukhumbu districts. Despite being a reservoir project, the number of displaced households is relatively low.

A version of this article appears in e-paper on May 17, 2020 of The Himalayan Times.

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