KATHMANDU, Sept 5: The Investment Board Nepal (IBN) has asked the developer of Upper Karnali Hydropower Project to submit time-bound activities, including its plan to sign power purchase agreement and financing agreement with financial institutions, before taking any decision on its application to extend deadline to achieve financial closure.
The deadline given to GMR Upper Karnali Hydropower Ltd, the developer of the 900-megawatt project, is expiring on September 19. The company is promoted by Indian infrastructure developer GMR Group.
GMR had applied for deadline extension in mid-July, citing reasons like impacts of last year's earthquake, disruption in energy supply, and delay in acquiring land for project site.
"We will consider GMR's application after studying time-bound plans submitted by it," IBN CEO Maha Prasad Adhikari told media persons on Sunday.
However, it is not only the developer that is delaying the project. The government is yet to settle the issue of 124 unregistered land parcels (in Bhairavsthan VDC of Achham) in the project site, and endorse laws to address land compensation for acquired forest and allocate equity shares to project-affected locals.
The main purpose of establishing IBN, five years ago, was for providing one-stop solutions to investments. IBN officials say other ministries have not been helping it proactively. Almost all 15 projects initiated by IBN have stuck in one problem or the other.
Not only GMR, SJVN Arun-3 Power Development Company - the developer of Arun III project - has also sought extension in deadline to achieve financial closure. The deadline is expiring on November 25.
SJVN Arun-3 Power Development Company is promoted by SJVNL India Ltd.
But IBN officials say that the company was likely to achieve financial closure sooner. "This project has made good progress as its land acquisition work is about to be completed. It can decide on financial closure sooner as it is directly financed by the Government of India," added Adhikari.
However, the Chemical Fertilizer Project is likely to be shelved at least until the country has 300 MW of excess energy, IBN officials say“ "It is almost impossible to arrange energy for the project from other source”," they say.
However, the Kathmandu Integrated Solid Waste Management Project is heading in the right direction“ "We are preparing to start negotiation with two firms for the development of the project," Adhikari said.
The project worth Rs 8.2 billion, which will manage solid waste in the capital and generate energy from it, is being developed in three packages.