Himalayan News Service

New Delhi, January 22:

India’s National Hydroelectric Power Corp (NHPC) is hoping to get the go-ahead soon for a 480-MW project in Nepal that will help meet the power requirements of both the countries.

“We have been trying for a hydropower project on the Karnali river in western Nepal for two years. The Indian government is also very keen on the project which will help meet the power needs of both countries,” NHPC chairman and managing director Yogendra Prasad said.

The largest Indian hydropower development organisation, NHPC had earlier constructed the 14.5-MW Devighat power project in Nepal. This was fully funded by the Indian government and has helped to meet Nepal’s requirement since 1967.

“Now with most of the points with regard to the Karnali project having been resolved, I hope to visit Kathmandu in the first week of February to finalise the parameters of the project and the memorandum of understanding (MoU),” said Prasad.

The MoU is likely to be signed within a fortnight of NHPC and Nepal Electricity Authority (NEA) reaching an agreement. Originally planned as a 300-MW project, NHPC has since re-evaluated the Karnali river potential and upgraded the project plan to 480 MW. The project cost is now estimated to be $548.5 million.

“We plan to undertake the project on a build-operate-transfer (BOT) basis. After completion of the project, it would be handed over to the Nepal government after 30-35 years of the project cost recovery,” said Prasad. Under the proposed joint venture, the Nepal government, through NEA, is expected to take 26 per cent equity while NHPC would hold the remaining 74 per cent. “This is to be a bilateral agreement with the government of Nepal with the approval of the Indian government. While 30 per cent of the project cost would be raised through equity, the remaining would be raised through financial institutions. The project would take four and a half years to be executed and should be ready by 2009,” said Prasad.