Nepal | September 22, 2020

Govt secretly allows capacity reduction


Himalayan News Service
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Initially, the government had signed a pact to develop 650 MW

Kathmandu, July 27

The Ministry of Energy, Water Resources and Irrigation has secretly allowed the developer to sign an agreement to build the Tamakoshi III hydropower project with reduced capacity of 200 megawatts.

Initially, the government had signed a pact with the developer to build the project with 650MW capacity.

Two Chinese companies have joined hands with a Nepali company, TBI Holdings, and signed an agreement in the presence of Minister of Energy, Water Resources and Irrigation Barsha Man Pun to construct the Tamakoshi III project with an investment of around $500 million.

The government had awarded the project survey licence to TBI, which is owned by the incumbent President of Non-Resident Nepali Association Bhaban Bhatta, in October 2017.

According to Xinhua, the Chinese news agency, a joint venture development framework agreement was signed between China’s YEIG International, Shanghai Investigation, Design and Research Institute Co Ltd and Nepal’s TBI Holdings Pvt Ltd at a ceremony in Kathmandu on Thursday.

The signing ceremony was witnessed by Minister Pun and Zhang Guohua, vice-governor of southwest China’s Yunnan Province, chairman of Nepal Electricity Regulatory Commission, among other officials and stakeholders.

However, government officials say that they do not know anything about the event.

Prabin Aryal, spokesperson of the energy ministry, said that he was unaware of the event and added, “I will be able to comment on it only after studying the details.” He further said that the agreement was not the final document authorising reduction in the capacity of the project and added, “The exact capacity will be determined only after all the necessary studies are completed.”

According to Xinhua, Minister Pun, during the agreement signing ceremony, had said that the project would work as a symbol of friendship and cooperation in the hydropower sector between the two countries.

Dilli Bahadur Singh, chairman of Nepal Electricity Regulatory Commission, who was a witness to the agreement signing ceremony, said the government had agreed to reduce the project’s capacity because it was not economically viable. He further added that the project was at present in the under-study phase and whether it was viable or not could be ascertained only after the study was completed.

“I am only a witness. I got to know from the government authority that there was no market for the project with the huge installed capacity of 650MW, hence it was reduced to 200 MW,” he added.

“On the one hand, the government is planning to sell electricity to Bangladesh and India, while on the other, it is reducing the pre-determined capacity of the project. Our minister and officials need to ‘walk the talk’ if they want to attract foreign investment because we can’t keep changing our stance every now and then,” said a high-ranking official at the ministry, seeking anonymity.

As per the agreement between the two Chinese firms and TBI Holdings, construction of the 200-MW hydropower project will start in early 2020 and will be completed in three-anda-half years.

In 2007, the government and a Norwegian company named Statkraft had agreed to build the project with capacity of 650 MW.

However, Statkraft withdrew from from the agreement in 2015, stating that there was no guaranteed market for the electricity that would be produced.

The hydropower project will be developed on the Tamakoshi River, a part of the Koshi River basin, which flows through Dolakha and Ramechhap districts.

A version of this article appears in print on July 28, 2019 of The Himalayan Times.

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