Upper Tamakoshi, NEA sign PPA

KATHMANDU, April 26: Nepal Electricity Authority (NEA) has agreed to buy all 456 megawatt of electricity to be generated from Upper Tamakoshi Hydropower Company at Rs 4.06 per unit from the date of the commercial operation of the project.



The Rs 33 billion project is considered to be the cheapest and biggest project to be built with a domestic investment. [break]



NEA Executive Director Dr Jibendra Jha and Managing Director of the company Bhojraj Regmi signed a memorandum of understanding on Power Purchase Agreement (PPA) on Monday, with 3 percent price escalation rate every year.



According to Shashisagar Raj Rajbhandari, Director of Power Trade Department of NEA, the agreed rate for the fiscal year 2010/2011 is Rs 3.50 per unit.



Power production by Upper Tamakoshi Hydel is expected to begin in 2015/16. With 3 percent price escalation rate, the price after 14 years of operation will roughly be Rs 5 a unit.



The NEA is yet to endorse the agreement from its board chaired by Energy Minister Dr Prakah Sharan Mahat.



Mrigendra Bahadur Shrestha, Project Director,said the financial closure of the project is soon going to be finalized within the next two months.

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