NEA, CWEI to register JV company to begin study at the project site
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KATHMANDU, April 14: The Investment Board Nepal (IBN) on Monday approved investment from China's CWE Investment Corporation (CWEI) to develop West Seti (750 MW). This should help move project development forward, IBN officials say.
A decision of IBN's board meeting, led by Prime Minister Sushil Koirala, also decided to direct the Chinese company and Nepal Electricity Authority (NEA) to register a joint venture company to develop the project, which has an estimated cost of Rs 160 billion.
National Planning Commission Vice Chairman Govind Raj Pokhrel said the decision opens ground to begin some work on the technical study of the project, along with help in starting negotiation for the Project Development Agreement of the project. Pokhrel is also a member of the IBN board.
Ghanashyam Ojha, external relations focal person at IBN, said the decision has ended any confusion related to the project.
The government had signed a Memorandum of Understanding (MoU) with CWEI in 2012 to develop the project for the domestic consumption purposes. However some issues like who would buy the energy and development of over 500-km transmission line, among others, were undecided then. With the signing of a Power Trade Agreement (PTA) with India by Nepal last year, selling the power to India has become an option and developer is also convinced of the market so far.
CWEI is a subsidiary company of Three Gorges Corporation, a pioneer hydropower developer from China.
China's Three Gorges Corporation Chairman Lu Chun had visited Nepal in the third week of March and met with the Prime Minister and other concerned people and had drawn the government's attention to need for support in the resettlement and rehabilitation of the families that would be displaced by the run-of-the-river project.
According to a statement issued by IBN, Koirala had stressed on the bringing in of foreign investment as far as possible in large scale projects.
Likewise, IBN has also set a fee for negotiation of Project Development Agreements at US$ 1,500 per proposed MW. It has also decided on a negotiation team for PDA signing with hydropower projects and any other project.
The IBN CEO will lead the PDA negotiations team, comprising six other officials of the concerned ministries. Fee for PDA negotiations were not set for Upper Karnali and Arun III as they were projects awarded after open competition, unlike West Seti, an IBN official told Republica.
