Nepal | September 26, 2020

HIDCL, Power China to build 762MW Tamor hydel

The state-owned Chinese company to invest nearly $1.60 billion in two hydropower projects

Himalayan News Service
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Kathmandu, October 13

The government has awarded the 762-megawatt Tamor reservoir hydropower project to a Nepali and Chinese joint venture firm. Hydroelectricity Investment and Development Company Ltd (HIDCL) of Nepal and state-owned Power China Corporation will construct the project on government-to-government (G2G) basis.

Construction of the Tamor project is expected to start from next fiscal and be completed by 2025.

During Chinese President Xi Jinping’s two-day state visit to Nepal, the Investment Board Nepal (IBN) and Ministry of Energy, Water Resources and Irrigation (MoEWRI) awarded the contract to HIDCL-Power China to build the project under the public-private-partnership (PPP) model.

Minister for Energy, Water Resources and Irrigation, Barsha Man Pun, informed that the government has also signed an agreement with Power China to build the 156-megawatt Madi multipurpose hydropower project which is located in Rolpa district. As per an initial study, the project cost is around $39 million.

Earlier, HIDCL and Power China had jointly submitted a project development proposal at the IBN to build both the projects with a share structure of 46:54 per cent for the Tamor project, with the Nepali firm investing 46 per cent and Power China investing 54 per cent of the project cost. Similarly, in Madi multipurpose hydropower project, HIDCL will manage 26 per cent and Power China will manage 74 per cent of the total investment.

After receiving the award letter from IBN, Power China signed a memorandum of understanding (MoU) on project implementation agreement with HIDCL today. Chhabi Raj Pokharel, chief executive officer of HIDCL and Pan Deng Yu, vice chairman of Power China signed the MoU on behalf of their respective organisations.

The Tamor reservoir project will cover Panchthar, Taplejung, Terhathum and Sankhuwasabha districts.

Prime Minister KP Sharma Oli-led meeting of IBN had shortlisted three companies and sought proposals from Power China, Nebras Power Holding of Qatar and Fuji Electric Company Ltd of Japan on August 1. However, till the final date — September 15 — to submit the power development proposal, only HIDCL-Power China had jointly submitted a proposal to develop the Tamor reservoir project.

The government had showcased the project at the second Investment Summit on March 29 and 30.

Earlier, IBN had formed a committee led by Minister Pun to conduct necessary assessment of the proposal and submit it to the IBN. After studying details of the project, the HIDCL-Power China proposal was forwarded to the IBN, which was
finalised today.

As per IBN, the government will acquire necessary land and provide it to the developer. The government will also provide project security. Likewise, it will facilitate in legal approvals/permits, review and monitoring of the project.

Meanwhile, the developer will plan, design, build, finance and operate the facilities during the concession period of 30 years. Similarly, the project developer will also be responsible for collecting revenue from the project during the concession period. After the concession period is over, the developer will have to hand over the project to the government.

As per an earlier study, the construction cost of the Tamor project has been estimated at $1.21 billion, including interest during construction, finance cost and the 75-kilometre-long 400 kVA double-circuit transmission line from the project site to Inaruwa in Sunsari district.

As per the Nepal Electricity Authority study, if the project builds a dam that is 205 metres high then it will generate 762 MW of electricity. However, if the height of the dam is increased to 300 metres the project can generate 2,565 MW of electricity.


A version of this article appears in print on October 14, 2019 of The Himalayan Times.

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