KATHMANDU, SEPTEMBER 12
Minister for Energy, Water Resources and Irrigation Shakti Bahadur Basnet has laid the foundation stone for the construction of 29.5-metre high dam of the 216 MW Upper Trishuli-1 (UT-1) runof-the-river hydroelectric project in Trishuli River of Rasuwa District.
Minister Basnet laid the foundation stone for the project amidst a special ceremony held today.
Nepal Water and Energy Development Company (NWEDC), a special purpose vehicle through which Korea South-East Power Co (KOEN) along with Korea Overseas Infrastructure and Urban Development Corporation (KIND), International Finance Corporation (IFC) a member of World Bank Group, and domestic investor are developing the project as per build-own-operate-transfer (BOOT) modality under a project development agreement signed with the Nepal government in December of 2016.
UT-1 is the largest hydroelectric project under construction with foreign direct investment for domestic consumption.
The concession period for the project is 35 years, including five years of construction period.
Addressing the ceremony, Minister Basnet said that Nepal has huge potential of hydropower and government is fully committed to create favourable environment for domestic and foreign investors to develop the hydropower projects and called upon the investors to bring in more and more investment in the sector.
He urged to complete the project on schedule and assured necessary coordination and facilitation.
President and CEO of KOEN Kim Hoe-chun said the project is very important for fulfilling increasing internal power demand especially during the dry season and would contribute in reducing power import.
The project's main construction started in January 2022 and it is estimated to be completed in December of 2026. The main construction works including the excavation of the underground powerhouse, headrace tunnel, head works are in full swing and the overall progress rate of the project is 22 per cent.
Doosan Enerbility is the engineering, procurement, and construction (EPC) contractor for the project.
Approximately 1,000 workers work at the construction site, including about 500 local residents from project-affected Rasuwa district. During the construction period (five years) 700 to 1,000 Nepali employees will work for the project.
And 70 to 80 Nepali employees will work during the operation period (30 years).
The $647.34 million (including interest during construction) project is financed through 70 per cent debt and 30 per cent equity. The project partners will provide an equity investment of $194.20 million.
In comparison, the debt of $453.12 million is being provided by a group of international lenders, including the IFC, Asian Development Bank (ADB), Korean Exim Bank (K-EXIM), Korean Development Bank (KDB), Asian Infrastructure Investment Bank (AIIB), FMO (The Netherlands), the British International Investment (BII), Proparco (France), and the OPEC Fund for International Development (OFID).
The shareholders of NWEDC include KOEN, KIND, IFC, and a local Nepali partner.
In the future, the project-affected communities will get to apply for 10 per cent shares of the project.
UT-1 is expected to generate up to 1,533 GWh of electricity.
Out of the total annual energy generated by the project, 38.75 per cent will be generated during the dry season, which is higher than most of the other run-of-the-river hydropower projects in Nepal, thus contributing vastly to managing dry season electricity shortfall.
The energy generated by UT-1 can reduce diesel import by more than $20 million per year. NEA will purchase the entire electricity output of Upper Trishuli-1 under a 30-year power purchase agreement (PPA) signed with NWEDC in January 2018.
The project is very attractive for the country's power system as it is close to the Kathmandu Load Centre and will get 104 MW of electricity even in the dry season. The generated energy will flow to the national grid by connecting it to the Trishuli-3B hub substation that the NEA is constructing.
A version of this article appears in the print on September 13, 2023, of The Himalayan Times.
