Massive hike in hydro license fee this week
eKantipur.com
BY BIKASH SANGRAULA
The cabinet will effect massive increments in survey license fees as well as annual survey license renewal fees for hydropower projects by amending the fee appendix of the Electricity Regulation 1993 this week, according to sources at Ministry of Water Resources.
The survey license fee is being increased from the existing range of Rs 125 to Rs 750, to the range of Rs 50,000 to Rs 2 million, according to ministry sources.
The amendment, expected in a couple of days, will slap a survey license fee of Rs 50,000 for projects ranging from 1 megawatt (MW) to 5 MW, Rs 10,000 per MW for projects ranging from 5 MW to 100 MW, Rs 1 million for projects ranging from 100 MW to 500 MW and Rs 2 million for projects above 500 MW in size.
An equal amount of renewal fee will have to be paid by the licensee every year during renewal of the survey license. If work progress is achieved according to the work schedule committed to at the time of acquiring the license, there can be a maximum of four renewals. There is no provision of renewal after five years as the ministry officials consider this more than enough time to complete a project survey.
The government is making such provisions to ensure that survey license holders achieve work progress according to their commitment.
As of June 15 this year, the government had issued 141 project survey licenses to prospective developers for projects ranging from 1 megawatt (MW) to 400 MWs, according to figures provided by the Department of Electricity Development.
Combined, these projects have a total capacity to generate over 4,000 MWs of electricity.
However, actual survey progress has been seen in very few of these projects.
The existing lax licensing provisions were made at a time when there was little private sector interest in developing hydropower projects in the country.
Today, the interest is immense, to the extent that prospective developers are ready even to bid for projects, as has been the case for the 402 MW Arun III and 300 MW Upper Karnali.
Under the new provisions, the one time generation license fee for projects of the size 1 MW to 5 MW will be Rs 100,000. Similarly, the fee for projects of size 5 MW to 100 MW will be Rs 500,000, fee for projects of size 100 MW to 500 MW will be Rs 1 million, fee for projects of size 500 MW to 1000 MW will be Rs 2.5 million, while fee for projects above 1,000 MW in size will be Rs 5 million. The previous fee ranged from Rs 3000 to less than a hundred thousand rupees.
Generation license is issued for a one-time period of 35 years for projects planned to sell power in the country, and 30 years for projects planned for export.
Showing posts with label Hydro. Show all posts
Showing posts with label Hydro. Show all posts
Monday, September 03, 2007
11 hrs daily power cuts in offing
11 hrs daily power cuts in offing
eKantipur.com, 23-Aug-2007
BY BIKASH SANGRAULA
The country will face up to 11 hours of daily power cuts in the coming dry season (November-April), according to Nepal Electricity Authority (NEA). The power cuts will be inevitable owing to a peak time power deficit of as much as 354 megawatts (MW).
"The worst power cuts of 11 hours per day will happen in February-March 2008," said Sher Singh Bhat, chief of NEA's Load Dispatching Center (LDC). LDC is NEA's central body responsible for managing the country's power demand and supply and forecasting, preparing and enforcing power cut schedules.
Owing to heavy power cuts, every industry in Birgunj will have to be closed for two to three days a week. The current demand in Birgunj alone is 125 MW, Bhat said.
The longest power cuts the country faced in the last dry season was seven hours daily. Between then and now, the country's energy demand and capacity demand have risen by 8.5 and 8.8 percent respectively, according to Bhat. However, there hasn't been any noteworthy addition of power stations in the national grid.
Addressing the country's business community in the capital on Thursday, Bhat said the peak electricity demand expected in the upcoming dry season is 714 megawatts, while the total energy availability then, including import from India, free power from Tanakpur, and operation of the country's thermal plants, will be just 360 megawatts.
"In the unlikely scenario that we import additional 50 megawatts from India under trading mode from November this year, apart from the 50 megawatt import under power exchange agreement and seventy million units from Tanakpur, the power cuts can go down to nine hours daily," Bhat said.
Forecasts for the coming years are not good either. Even if the 70 MW Middle Marsyangdi comes into operation in August 2008, there will still be up to 10 hours daily power cuts in the dry season of 2008/09, up to 13 hours daily in 2009/10, up to 14 hours daily in 2010/2011, and up to 17 hours daily in 2011/12.
Even in the event Nepal builds high-voltage transmission corridors with India by mid-2009, as targeted by NEA, to import additional power, the scenario does not look good. "If we want affordable electricity, we will have to purchase power from India's long-term market for which we will have to sign a 25-year take or pay agreements. If we want to buy from short-term markets, the effective cost after wheeling charge and trading margin will come to around Rs 12 per unit," Bhat said.
NEA currently charges an average tariff of Rs 6.50 to domestic consumers.
"The only solution is to develop our own projects," he said.
NEA has plans to start operation of 60 MW Upper Trishuli 3A, 27 MW Rahughat, and 14 MW Kulekhani III by 2010, and 45 MW Upper Trishuli 3B, 30 MW Chamelia, and 309 MW Upper Tamakoshi by 2012. Of these, only Kulekhani III and Chamelia are under construction.
eKantipur.com, 23-Aug-2007
BY BIKASH SANGRAULA
The country will face up to 11 hours of daily power cuts in the coming dry season (November-April), according to Nepal Electricity Authority (NEA). The power cuts will be inevitable owing to a peak time power deficit of as much as 354 megawatts (MW).
"The worst power cuts of 11 hours per day will happen in February-March 2008," said Sher Singh Bhat, chief of NEA's Load Dispatching Center (LDC). LDC is NEA's central body responsible for managing the country's power demand and supply and forecasting, preparing and enforcing power cut schedules.
Owing to heavy power cuts, every industry in Birgunj will have to be closed for two to three days a week. The current demand in Birgunj alone is 125 MW, Bhat said.
The longest power cuts the country faced in the last dry season was seven hours daily. Between then and now, the country's energy demand and capacity demand have risen by 8.5 and 8.8 percent respectively, according to Bhat. However, there hasn't been any noteworthy addition of power stations in the national grid.
Addressing the country's business community in the capital on Thursday, Bhat said the peak electricity demand expected in the upcoming dry season is 714 megawatts, while the total energy availability then, including import from India, free power from Tanakpur, and operation of the country's thermal plants, will be just 360 megawatts.
"In the unlikely scenario that we import additional 50 megawatts from India under trading mode from November this year, apart from the 50 megawatt import under power exchange agreement and seventy million units from Tanakpur, the power cuts can go down to nine hours daily," Bhat said.
Forecasts for the coming years are not good either. Even if the 70 MW Middle Marsyangdi comes into operation in August 2008, there will still be up to 10 hours daily power cuts in the dry season of 2008/09, up to 13 hours daily in 2009/10, up to 14 hours daily in 2010/2011, and up to 17 hours daily in 2011/12.
Even in the event Nepal builds high-voltage transmission corridors with India by mid-2009, as targeted by NEA, to import additional power, the scenario does not look good. "If we want affordable electricity, we will have to purchase power from India's long-term market for which we will have to sign a 25-year take or pay agreements. If we want to buy from short-term markets, the effective cost after wheeling charge and trading margin will come to around Rs 12 per unit," Bhat said.
NEA currently charges an average tariff of Rs 6.50 to domestic consumers.
"The only solution is to develop our own projects," he said.
NEA has plans to start operation of 60 MW Upper Trishuli 3A, 27 MW Rahughat, and 14 MW Kulekhani III by 2010, and 45 MW Upper Trishuli 3B, 30 MW Chamelia, and 309 MW Upper Tamakoshi by 2012. Of these, only Kulekhani III and Chamelia are under construction.
Tender to be invited for 396 MWs
Tender to be invited for 396 MWs
PR, 19-Aug-2007
Nepal Electricity Authority (NEA) will invite tenders for three projects totaling 396 MWs in the ongoing fiscal year, NEA's Managing Director Arjun Kumar Karki said on Sunday.
"Power generation projects need to swiftly move ahead to address the existing power crisis. In this context, NEA has already started construction of the 30 megawatt Chameliagadh and the 14 megawatt Kulekhani third projects. In the ongoing fiscal year, we will invite tenders for the 27 megawatt Rahughat, the 60 megawatt Upper Trishuli 3 A and the 309 megawatt Upper Tamakoshi," said Karki, at a function organized to mark NEA's 22nd anniversary.
Construction of Upper Trishuli 3 A will begin in the ongoing fiscal year with loan assistance from China, while the government of India has committed loan assistance for Rahughat, he added.
Presenting his report, Karki said NEA's net loss for fiscal year 2006/07 stood at 329.6 million, a 74 percent decrease from the preceding fiscal year. Increase in revenue, devaluation of dollar, and decrease by the government of interest it charges on loan to NEA from 10.25 pc to 8 percent were factors that contributed to cost saving, Karki said.
PR, 19-Aug-2007
Nepal Electricity Authority (NEA) will invite tenders for three projects totaling 396 MWs in the ongoing fiscal year, NEA's Managing Director Arjun Kumar Karki said on Sunday.
"Power generation projects need to swiftly move ahead to address the existing power crisis. In this context, NEA has already started construction of the 30 megawatt Chameliagadh and the 14 megawatt Kulekhani third projects. In the ongoing fiscal year, we will invite tenders for the 27 megawatt Rahughat, the 60 megawatt Upper Trishuli 3 A and the 309 megawatt Upper Tamakoshi," said Karki, at a function organized to mark NEA's 22nd anniversary.
Construction of Upper Trishuli 3 A will begin in the ongoing fiscal year with loan assistance from China, while the government of India has committed loan assistance for Rahughat, he added.
Presenting his report, Karki said NEA's net loss for fiscal year 2006/07 stood at 329.6 million, a 74 percent decrease from the preceding fiscal year. Increase in revenue, devaluation of dollar, and decrease by the government of interest it charges on loan to NEA from 10.25 pc to 8 percent were factors that contributed to cost saving, Karki said.
Chilime to cap price for next 4.5 yrs
Chilime to cap price for next 4.5 yrs
eKantipur.com, 28-Jul-2007
BY BIKASH SANGRAULA
The 20 megawatt Chilime Hydroelectric Project, which went from fame to infamy for first being an indigenous and cheapest power producer in the country and later the most expensive power vendor to Nepal Electricity Authority (NEA), will put a cap on its existing selling price for the next four-and-a-half years.
"A board meeting of Chilime Hydropower Company is taking a decision to this effect Sunday," said Gokarna Prasad Sharma, board member of the company, whose 51 percent shares are owned by NEA, and 25 percent by NEA employees. The remaining 24 percent shares are being issued to the public by the end of this fiscal year.
Chilime has an agreement to raise the price of electricity it sells to NEA by eight percent annually, the highest raise NEA has agreed to its suppliers.
"The project came into operation four-and-a-half-years later than scheduled, but the power price was adjusted even for that period," said Sharma. "The project has, therefore, decided not to raise power price for the next four-and-half years in view of the raise that was made even during the delay period," Sharma explained.
Owing to the eight percent annual increment, Chilime currently sells electricity to NEA at Rs 6.17 per unit, which is the highest price NEA pays to any supplier. NEA's average retail price is Rs 6.5 per unit. In 1995, NEA signed a Power Purchase Agreement (PPA) with Chilime at Rs 3 per unit, which was to be applicable from 1999, the original scheduled deadline for the project's commissioning. However, the project came into operation only in the later part of 2003, and by that time, the price had already shot up to nearly Rs 4.
According to Sharma, there have already been increments eight times in the price of power the project sells to NEA, including the period of delay.
"The maximum number of times the increments can be made, according to the existing agreement, is twelve, after which the price will remain constant" he said.
Chilime was built entirely through indigenous labour and capital, with the production cost at just Rs 2.19 per unit, the cheapest in the country, due to which the country's entire power sector and the media praised it, until the price arrangements came to light in recent months.
In the fiscal year 2006/07, NEA registered a net loss of Rs 2.4 billion, of which it lost Rs 1.75 billion in transactions with Chilime, the 36-megawatt Bhotekoshi and the 60-megawatt Khimti projects, with which NEA has "take or pay" agreements.
On the other hand, the three producers pocketed a total profit of Rs 1.4 billion in the same fiscal year, of which Chilime netted Rs 380 million.
Chilime project, located in Rasuwa district, is connected to the national power grid through a 38-km 66kV transmission line of the Trishuli-Devighat sub-station.
eKantipur.com, 28-Jul-2007
BY BIKASH SANGRAULA
The 20 megawatt Chilime Hydroelectric Project, which went from fame to infamy for first being an indigenous and cheapest power producer in the country and later the most expensive power vendor to Nepal Electricity Authority (NEA), will put a cap on its existing selling price for the next four-and-a-half years.
"A board meeting of Chilime Hydropower Company is taking a decision to this effect Sunday," said Gokarna Prasad Sharma, board member of the company, whose 51 percent shares are owned by NEA, and 25 percent by NEA employees. The remaining 24 percent shares are being issued to the public by the end of this fiscal year.
Chilime has an agreement to raise the price of electricity it sells to NEA by eight percent annually, the highest raise NEA has agreed to its suppliers.
"The project came into operation four-and-a-half-years later than scheduled, but the power price was adjusted even for that period," said Sharma. "The project has, therefore, decided not to raise power price for the next four-and-half years in view of the raise that was made even during the delay period," Sharma explained.
Owing to the eight percent annual increment, Chilime currently sells electricity to NEA at Rs 6.17 per unit, which is the highest price NEA pays to any supplier. NEA's average retail price is Rs 6.5 per unit. In 1995, NEA signed a Power Purchase Agreement (PPA) with Chilime at Rs 3 per unit, which was to be applicable from 1999, the original scheduled deadline for the project's commissioning. However, the project came into operation only in the later part of 2003, and by that time, the price had already shot up to nearly Rs 4.
According to Sharma, there have already been increments eight times in the price of power the project sells to NEA, including the period of delay.
"The maximum number of times the increments can be made, according to the existing agreement, is twelve, after which the price will remain constant" he said.
Chilime was built entirely through indigenous labour and capital, with the production cost at just Rs 2.19 per unit, the cheapest in the country, due to which the country's entire power sector and the media praised it, until the price arrangements came to light in recent months.
In the fiscal year 2006/07, NEA registered a net loss of Rs 2.4 billion, of which it lost Rs 1.75 billion in transactions with Chilime, the 36-megawatt Bhotekoshi and the 60-megawatt Khimti projects, with which NEA has "take or pay" agreements.
On the other hand, the three producers pocketed a total profit of Rs 1.4 billion in the same fiscal year, of which Chilime netted Rs 380 million.
Chilime project, located in Rasuwa district, is connected to the national power grid through a 38-km 66kV transmission line of the Trishuli-Devighat sub-station.
Wednesday, July 04, 2007
Parties for free energy from West Seti
Parties for free energy from West Seti, Against separate project for Nepal
eKantipur.com, 25-Jul-07
Parliamentarians representing the major parties in the Interim Parliament demanded on Monday that the government amend the agreement with Australia's Snowy Mountain Engineering Corp (SMEC) so that it provide free energy to Nepal from the 750 megawatt West Seti project, instead of providing cash benefit.
In a meeting of the Interim Parliament's Natural Resources and Means Committee, parliamentarians representing NC, CPN (UML), NSP (A), PFN, and United Left Front also asked the government to ensure that SMEC provides free energy from West Seti itself, instead of building another project to give Nepal the free energy.
Furthermore, the parliamentarians told the government to ensure that Nepal gets 10 percent of total generation, instead of just 75 megawatts, as it is possible that the project's installed capacity will cross 750 megawatts.
"We should ask for ten percent free energy from West Seti itself, and we should get the free energy right from the day the project starts generation," said NC's Ananda Dhungana.
Parliamentarians Hridayesh Tripathi of NSP (A) and Lilamani Pokharel of PFN expressed doubts that the project's developer would build another project for providing free energy. They therefore pushed for 10 percent free energy from West Seti itself.
United Left Front's C P Mainali also said that Nepal should ask for benefit in kind instead of cash. Mainali also asked the government why the provision of 10 percent free energy was revised in favor of either free energy or cash, and finally in favor of cash.
However, parliamentarians representing CPN (Maoist) urged the government to halt all decisions on mega projects. Parliamentarians Dinanath Sharma and Lokendra Bista said that the country's priority at the moment is conducting constituent assembly election, and not making decisions on mega projects. RPP's Govinda Bikram Shah concurred with them.
Answering the parliamentarians, Acting Secretary of the Ministry of Water Resources Jitendra Ghimire said that a minute has been signed with SMEC for free energy to Nepal. Ghimire added that the government will ensure increment in free energy to Nepal in the event the project's installed capacity increases.
The government had signed an agreement with SMEC in 1994 for 10 percent free energy to Nepal. The agreement was revised to "either free energy or cash" in 1997, and later to cash benefit in 1998.
In 2003, during the tenure of former Minister of Water Resources Dipak Gyawali, a minute was signed with SMEC stating that the government would identify another project so that SMEC would build it for Nepal for providing free energy. Discussions had taken place then to award the 122 megawatt Upper Seti to SMEC for the purpose.
eKantipur.com, 25-Jul-07
Parliamentarians representing the major parties in the Interim Parliament demanded on Monday that the government amend the agreement with Australia's Snowy Mountain Engineering Corp (SMEC) so that it provide free energy to Nepal from the 750 megawatt West Seti project, instead of providing cash benefit.
In a meeting of the Interim Parliament's Natural Resources and Means Committee, parliamentarians representing NC, CPN (UML), NSP (A), PFN, and United Left Front also asked the government to ensure that SMEC provides free energy from West Seti itself, instead of building another project to give Nepal the free energy.
Furthermore, the parliamentarians told the government to ensure that Nepal gets 10 percent of total generation, instead of just 75 megawatts, as it is possible that the project's installed capacity will cross 750 megawatts.
"We should ask for ten percent free energy from West Seti itself, and we should get the free energy right from the day the project starts generation," said NC's Ananda Dhungana.
Parliamentarians Hridayesh Tripathi of NSP (A) and Lilamani Pokharel of PFN expressed doubts that the project's developer would build another project for providing free energy. They therefore pushed for 10 percent free energy from West Seti itself.
United Left Front's C P Mainali also said that Nepal should ask for benefit in kind instead of cash. Mainali also asked the government why the provision of 10 percent free energy was revised in favor of either free energy or cash, and finally in favor of cash.
However, parliamentarians representing CPN (Maoist) urged the government to halt all decisions on mega projects. Parliamentarians Dinanath Sharma and Lokendra Bista said that the country's priority at the moment is conducting constituent assembly election, and not making decisions on mega projects. RPP's Govinda Bikram Shah concurred with them.
Answering the parliamentarians, Acting Secretary of the Ministry of Water Resources Jitendra Ghimire said that a minute has been signed with SMEC for free energy to Nepal. Ghimire added that the government will ensure increment in free energy to Nepal in the event the project's installed capacity increases.
The government had signed an agreement with SMEC in 1994 for 10 percent free energy to Nepal. The agreement was revised to "either free energy or cash" in 1997, and later to cash benefit in 1998.
In 2003, during the tenure of former Minister of Water Resources Dipak Gyawali, a minute was signed with SMEC stating that the government would identify another project so that SMEC would build it for Nepal for providing free energy. Discussions had taken place then to award the 122 megawatt Upper Seti to SMEC for the purpose.
Sunday, June 17, 2007
NEA's unpaid account rises to Rs 780 million
NEA's unpaid account rises to Rs 780 million
eKantipur.com, 16-Jun-2007
Eastern regional office of Nepal Electricity Authority (NEA) has over Rs 780 million to collect from its clients. Of the total dues, it has accounted over Rs 40 million as bad debt, as those belong to clients who have refused to pay and have been blacklisted.
Defaulters of NEA's book of accounts include municipalities of the region, village development committees, government offices, industries, trading houses and household clients.
According to Tanka Prasad Shrestha, assistant director of NEA, the bulkiest unsettled account stands for electricity consumed by streetlights in municipalities and VDCs.
“Municipalities of 13 districts of the eastern region alone have Rs 288.61 million to pay to the NEA,” Shrestha told the Post.
Officials at the NEA regional office said that arrears of local bodies have shot up mainly because they have not been clearing bills fearing it would impact their budget. In fact, they have repeatedly refused to verify the volume of electricity consumed by them.
“Municipality officials do not respond to our request to conduct verification of bills generated from street lights,” said Shrestha, adding that lack of formal ownership of those bills by the municipalities have affected NEA in its endeavor to collect the bill amount.
Under the existing system, local bodies need to settle bills of street lamps. In case they cannot do so, they have to verify the bills, certifying that those were generated by street lamps, to pave way for the NEA to approach the Ministry of Local Development for payment
In latter mode of payment, the Ministry deducts the payment amount from the budget allocated to local bodies. As that reduces the budget the local bodies would receive, municipality officials have been avoiding verification of NEA bills.
The system of verification is followed because most of the street lamps do not have meters.
Very recently, Udaypur and Ilam municipalities have agreed for the verification, said Shrestha. According to NEA records, Ilam has unsettled bills worth Rs 3.63 million and Udaypur has dues totaling to Rs 815,000. The largest defaulter of NEA bills in the region is Biratnagar sub-metropolis. It owes Rs 68.39 to NEA. Rajbiraj has unpaid due of Rs 42.12 million, Itahari - Rs 48.74 million, Lahan - Rs 50.37 million and Dharan - Rs 24.68 million.
Likewise, Siraha has to pay Rs 14.72 million, Duhabi - Rs 11.66 million, Bhadrapur - Rs 17.25 million, Damak - Rs 4.01 million and Dhankuta - Rs 2.17 million.
eKantipur.com, 16-Jun-2007
Eastern regional office of Nepal Electricity Authority (NEA) has over Rs 780 million to collect from its clients. Of the total dues, it has accounted over Rs 40 million as bad debt, as those belong to clients who have refused to pay and have been blacklisted.
Defaulters of NEA's book of accounts include municipalities of the region, village development committees, government offices, industries, trading houses and household clients.
According to Tanka Prasad Shrestha, assistant director of NEA, the bulkiest unsettled account stands for electricity consumed by streetlights in municipalities and VDCs.
“Municipalities of 13 districts of the eastern region alone have Rs 288.61 million to pay to the NEA,” Shrestha told the Post.
Officials at the NEA regional office said that arrears of local bodies have shot up mainly because they have not been clearing bills fearing it would impact their budget. In fact, they have repeatedly refused to verify the volume of electricity consumed by them.
“Municipality officials do not respond to our request to conduct verification of bills generated from street lights,” said Shrestha, adding that lack of formal ownership of those bills by the municipalities have affected NEA in its endeavor to collect the bill amount.
Under the existing system, local bodies need to settle bills of street lamps. In case they cannot do so, they have to verify the bills, certifying that those were generated by street lamps, to pave way for the NEA to approach the Ministry of Local Development for payment
In latter mode of payment, the Ministry deducts the payment amount from the budget allocated to local bodies. As that reduces the budget the local bodies would receive, municipality officials have been avoiding verification of NEA bills.
The system of verification is followed because most of the street lamps do not have meters.
Very recently, Udaypur and Ilam municipalities have agreed for the verification, said Shrestha. According to NEA records, Ilam has unsettled bills worth Rs 3.63 million and Udaypur has dues totaling to Rs 815,000. The largest defaulter of NEA bills in the region is Biratnagar sub-metropolis. It owes Rs 68.39 to NEA. Rajbiraj has unpaid due of Rs 42.12 million, Itahari - Rs 48.74 million, Lahan - Rs 50.37 million and Dharan - Rs 24.68 million.
Likewise, Siraha has to pay Rs 14.72 million, Duhabi - Rs 11.66 million, Bhadrapur - Rs 17.25 million, Damak - Rs 4.01 million and Dhankuta - Rs 2.17 million.
Saturday, June 09, 2007
India to offer Nepal another 40 MWs
India to offer Nepal another 40 MWs
eKantipur.com, 8-Jun-2007
BY BIKASH SANGRAULA
India's Central Electricity Authority (CEA) has agreed to upgrade the Duhabi-Kataiya cross border transmission link by October this year to allow Nepal to import an additional 40 megawatts of electricity from the southern neighbor on a commercial basis.
During the last dry season, Nepal imported up to 80 megawatts from India, including 50 megawatts from the Duhabi-Kataiya link.
"With the import of 40 additional megawatts, Nepal will not face worse load-shedding in the coming dry season than it did in the last dry season," said Arjun Kumar Karki, managing director of Nepal Electricity Authority (NEA), who led the Nepalese team in the eighth Indo-Nepal Power Exchange Committee meeting that concluded in Kathmandu on Friday.
Similarly, the two countries have agreed on a power exchange tariff of Rs 5.7 (IRs 3.59). The average tariff NEA charges to customers is Rs 6.7.
The tariff will be applicable to both the power exported to India and imported from India. Also, the annual increment of tariff has been reduced from the existing 8.5 percent flat, to 5 percent till June 2008, and 5.5 percent thereafter till June 2009, after which it will again be revised.
Nepal will now be paying its outstanding dues to electricity boards in several neighboring Indian states based on the new tariff rate. According to a member in the Indian delegation, the revision of the annual increment in tariff means that Nepal's outstanding dues to India for imported electricity has gone down from IRs 100 crores to IRs 85 crores.
NEA's Karki added that it was also agreed in the meeting to allow NEA to sell to India, on a commercial basis, the free energy Nepal gets from the 120 megawatt Tanakpur hydroelectric project.
Nepal gets 70 million units of free power from Tanakpur. However, as much as one-third of the electricity was being wasted as there is little load in Nepalese territory near the Tanakpur project.
"Now, NEA can sell the unused energy in the Indian market on a commercial basis," said Karki.
Additionally, it has been agreed that Nepal can export some 40 megawatt of excess power to India during wet season on a commercial basis through the Gandak-Ramnagar transmission link.
The two countries have also agreed to dismantle five of the 21 existing cross border transmission links, which are currently in disuse.
Constituted in 1991, the Indo-Nepal Power Exchange Committee was supposed to meet once every year. However, it was not held for four long years after the seventh meeting in 2003.
The Indian delegation for the eighth meeting was led by V Ramakrishnan, member of CEA, India.
eKantipur.com, 8-Jun-2007
BY BIKASH SANGRAULA
India's Central Electricity Authority (CEA) has agreed to upgrade the Duhabi-Kataiya cross border transmission link by October this year to allow Nepal to import an additional 40 megawatts of electricity from the southern neighbor on a commercial basis.
During the last dry season, Nepal imported up to 80 megawatts from India, including 50 megawatts from the Duhabi-Kataiya link.
"With the import of 40 additional megawatts, Nepal will not face worse load-shedding in the coming dry season than it did in the last dry season," said Arjun Kumar Karki, managing director of Nepal Electricity Authority (NEA), who led the Nepalese team in the eighth Indo-Nepal Power Exchange Committee meeting that concluded in Kathmandu on Friday.
Similarly, the two countries have agreed on a power exchange tariff of Rs 5.7 (IRs 3.59). The average tariff NEA charges to customers is Rs 6.7.
The tariff will be applicable to both the power exported to India and imported from India. Also, the annual increment of tariff has been reduced from the existing 8.5 percent flat, to 5 percent till June 2008, and 5.5 percent thereafter till June 2009, after which it will again be revised.
Nepal will now be paying its outstanding dues to electricity boards in several neighboring Indian states based on the new tariff rate. According to a member in the Indian delegation, the revision of the annual increment in tariff means that Nepal's outstanding dues to India for imported electricity has gone down from IRs 100 crores to IRs 85 crores.
NEA's Karki added that it was also agreed in the meeting to allow NEA to sell to India, on a commercial basis, the free energy Nepal gets from the 120 megawatt Tanakpur hydroelectric project.
Nepal gets 70 million units of free power from Tanakpur. However, as much as one-third of the electricity was being wasted as there is little load in Nepalese territory near the Tanakpur project.
"Now, NEA can sell the unused energy in the Indian market on a commercial basis," said Karki.
Additionally, it has been agreed that Nepal can export some 40 megawatt of excess power to India during wet season on a commercial basis through the Gandak-Ramnagar transmission link.
The two countries have also agreed to dismantle five of the 21 existing cross border transmission links, which are currently in disuse.
Constituted in 1991, the Indo-Nepal Power Exchange Committee was supposed to meet once every year. However, it was not held for four long years after the seventh meeting in 2003.
The Indian delegation for the eighth meeting was led by V Ramakrishnan, member of CEA, India.
We will renegotiate West Seti: Mahat
We will renegotiate West Seti: Mahat
eKantipur.com, 4-Jun-2007
BY BIKASH SANGRAULA
The government will renegotiate its deal with Australia's Snowy Mountain Engineering Corp (SMEC), developer of the 750 megawatt West Seti project, to revert the provision on benefit to Nepal from cash to 10 percent free energy.
"We will ask them (SMEC) to provide free energy. I am sure they will agree," said Finance Minister Dr Ram Sharan Mahat on Monday.
The government can still renegotiate the project agreement as it is yet to issue a generation license to SMEC, which is expected to take place after the end of the monsoon when the Australian company is commencing construction of the project in Doti district in far-western Nepal.
According to Mahat, the project agreement, which had originally stipulated that SMEC provide 10 percent free energy to Nepal, had been revised in favor of a cash benefit in the course of agreement renewals over the years.
The cash benefit arrangement, which was revealed by the Post on Monday, has an objectionable clause which can have a direct bearing on the security of the benefit for Nepal.
The current agreement with SMEC puts payment to Nepal at low priority.
Clause 2.4 of the existing agreement says, "Money payable from time to time by SMEC to debt participants or for operating costs in connection with the project will have priority in payment over money payable to Nepal, and following payments to debt participants and operating costs if there is insufficient money to pay Nepal, the obligation to pay Nepal will be deferred until SMEC has sufficient funds to make payment."
For the past 10 years, West Seti had been promoted, both by SMEC and the government, as a project that would provide 10 percent free energy to Nepal. This continued till recently despite the fact that the government had revisited all project papers before a cabinet meeting agreed in April 26 this year to an Asian Development Bank (ADB) proposal for Nepal's 15 percent equity participation in the project through an ADB loan.
Parliamentary committee to throw in its weight
The Interim Parliament's Natural Resources and Means Committee, which has initiated an investigation into the the objectionable provisions contained in the agreement with SMEC, will settle for nothing less than reversal of the cash benefit arrangement to free energy.
"The clause related to the cash benefit arrangement demonstrates clear intention of non-payment," said Ananda Pokharel, committee member and interim parliamentarian from the CPN-UML. "We will revert the benefit arrangement to free energy."
Pokharel added that the committee would also assist the government in effecting further revisions in the project agreement, including the provision of additional energy to Nepal on a commercial basis if needed.
West Seti, a storage type project, is designed to supply peaking power to northern India. It's estimated cost is US $ 1.2 billion.
Twenty-six percent equity shares in the project are owned by SMEC, and 15 percent each by China National and Machinery Import and Export Corporation (CMEC), ADB, the government of Nepal, and India's Infrastructure Leasing and Financial Services (IL&FS). On the debt financing side, China Exim Bank is investing US $ 400m, IL&FS US$ 300m, Bank of China US $ 300m, the Industrial and Commercial Bank of China US $ 200m, and ADB US $ 50m.
Holders of the remaining 14 percent shares will be finalized soon, after which SMEC will seek a generation license.
eKantipur.com, 4-Jun-2007
BY BIKASH SANGRAULA
The government will renegotiate its deal with Australia's Snowy Mountain Engineering Corp (SMEC), developer of the 750 megawatt West Seti project, to revert the provision on benefit to Nepal from cash to 10 percent free energy.
"We will ask them (SMEC) to provide free energy. I am sure they will agree," said Finance Minister Dr Ram Sharan Mahat on Monday.
The government can still renegotiate the project agreement as it is yet to issue a generation license to SMEC, which is expected to take place after the end of the monsoon when the Australian company is commencing construction of the project in Doti district in far-western Nepal.
According to Mahat, the project agreement, which had originally stipulated that SMEC provide 10 percent free energy to Nepal, had been revised in favor of a cash benefit in the course of agreement renewals over the years.
The cash benefit arrangement, which was revealed by the Post on Monday, has an objectionable clause which can have a direct bearing on the security of the benefit for Nepal.
The current agreement with SMEC puts payment to Nepal at low priority.
Clause 2.4 of the existing agreement says, "Money payable from time to time by SMEC to debt participants or for operating costs in connection with the project will have priority in payment over money payable to Nepal, and following payments to debt participants and operating costs if there is insufficient money to pay Nepal, the obligation to pay Nepal will be deferred until SMEC has sufficient funds to make payment."
For the past 10 years, West Seti had been promoted, both by SMEC and the government, as a project that would provide 10 percent free energy to Nepal. This continued till recently despite the fact that the government had revisited all project papers before a cabinet meeting agreed in April 26 this year to an Asian Development Bank (ADB) proposal for Nepal's 15 percent equity participation in the project through an ADB loan.
Parliamentary committee to throw in its weight
The Interim Parliament's Natural Resources and Means Committee, which has initiated an investigation into the the objectionable provisions contained in the agreement with SMEC, will settle for nothing less than reversal of the cash benefit arrangement to free energy.
"The clause related to the cash benefit arrangement demonstrates clear intention of non-payment," said Ananda Pokharel, committee member and interim parliamentarian from the CPN-UML. "We will revert the benefit arrangement to free energy."
Pokharel added that the committee would also assist the government in effecting further revisions in the project agreement, including the provision of additional energy to Nepal on a commercial basis if needed.
West Seti, a storage type project, is designed to supply peaking power to northern India. It's estimated cost is US $ 1.2 billion.
Twenty-six percent equity shares in the project are owned by SMEC, and 15 percent each by China National and Machinery Import and Export Corporation (CMEC), ADB, the government of Nepal, and India's Infrastructure Leasing and Financial Services (IL&FS). On the debt financing side, China Exim Bank is investing US $ 400m, IL&FS US$ 300m, Bank of China US $ 300m, the Industrial and Commercial Bank of China US $ 200m, and ADB US $ 50m.
Holders of the remaining 14 percent shares will be finalized soon, after which SMEC will seek a generation license.
Hetauda Cement shuts down
Hetauda Cement shuts down
eKantipur.com, 1-Jun-2007
Irregular power supply has forced Hetauda Cement Factory (HCF) to shut down for past one week, creating a crunch in supply in the local market.
Seven hours of load shedding a week has badly affected production, HCF officials said. “We have sufficient raw materials and our machines are functioning. What shall we do when we do not have regular power supply?” asked Ramesh Kumar Aryal, general manager of the factory.
Due to shortage of Hetauda cement in the market, a popular brand, locals are compelled to depend on Indian cement, which is regarded to be of lower quality. HCF has capacity of rolling out 16,000 sacks per day. Last year the factory operated at half the full capacity due to various reasons. The already ailing HCF owes Rs 1 billion to various banks and financial institutions.
eKantipur.com, 1-Jun-2007
Irregular power supply has forced Hetauda Cement Factory (HCF) to shut down for past one week, creating a crunch in supply in the local market.
Seven hours of load shedding a week has badly affected production, HCF officials said. “We have sufficient raw materials and our machines are functioning. What shall we do when we do not have regular power supply?” asked Ramesh Kumar Aryal, general manager of the factory.
Due to shortage of Hetauda cement in the market, a popular brand, locals are compelled to depend on Indian cement, which is regarded to be of lower quality. HCF has capacity of rolling out 16,000 sacks per day. Last year the factory operated at half the full capacity due to various reasons. The already ailing HCF owes Rs 1 billion to various banks and financial institutions.
Water level dips at Kulekhani
Water level dips at Kulekhani
eKantipur.com, 28-May-2007
The water level of the Indra Sarovar, the reservoir providing water for Kulekhani Hydroelectric Project, has dropped to its lowest level due to lack of rainfall and the scorching heat for the past three weeks.
There might be no electricity generation from the second biggest hydropower project of Nepal if there is no rainfall within this week, warned experts at the Kulekhani hydroelectric project. Due to the lack of rainfall, most of the water sources supporting the Indra Sarovar are drying, according to experts.
Indra Sarovar, which can have maximum water level of 1530 meters above sea level, now has water up to 1,487 meters.
The current daily water level depletion is 50-75 centimeters, according to experts. "If this trend of water consumption goes on, it will take only a week for this reservoir to be empty," experts said.
It is not possible to generate electricity if water level in the reservoir goes below 1,480 meters.
eKantipur.com, 28-May-2007
The water level of the Indra Sarovar, the reservoir providing water for Kulekhani Hydroelectric Project, has dropped to its lowest level due to lack of rainfall and the scorching heat for the past three weeks.
There might be no electricity generation from the second biggest hydropower project of Nepal if there is no rainfall within this week, warned experts at the Kulekhani hydroelectric project. Due to the lack of rainfall, most of the water sources supporting the Indra Sarovar are drying, according to experts.
Indra Sarovar, which can have maximum water level of 1530 meters above sea level, now has water up to 1,487 meters.
The current daily water level depletion is 50-75 centimeters, according to experts. "If this trend of water consumption goes on, it will take only a week for this reservoir to be empty," experts said.
It is not possible to generate electricity if water level in the reservoir goes below 1,480 meters.
Sunday, May 20, 2007
Few more international than West Seti
Few more international than West Seti
eKantipur.com, 19-May-07
BY BIKASH SANGRAULA
After the end of this year's monsoon, the country's biggest ever infrastructure project, the 750-megawatt West Seti, will begin construction. But more than the size or cost (US $ 1.25 billion), it is the scale of international involvement that makes this project stand out among development ventures undertaken in Nepal.
The project has the involvement of four countries and two international banks in areas including investment, construction, insurance, transmission and consumption.
Australia's Snowy Mountain Engineering Corp (SMEC) took a decade to bring the storage-type project to the construction stage since signing a Project Agreement with the government of Nepal in June 1997 to develop and operate the project for 30 years.
"West Seti is a project that has been subject to particularly rigorous international analysis and review," said Bob Scott, SMEC chairman.
According to SMEC, the project will be owned by Chinese, Australian and Indian investors, apart from the government of Nepal and the Asian Development Bank (ADB).
A statement issued by SMEC after a shareholders' meeting in Kathmandu last week said that 26 percent of equity shares for the project will be owned by SMEC, and 15 percent each by China National and Machinery Import and Export Corporation (CMEC), ADB, the government of Nepal, and India's Infrastructure Leasing and Financial Services (IL&FS). Holders of the remaining 14 percent of shares will be finalized soon.
Similarly, on the debt financing side, China Exim Bank is investing US $ 400 m, IL&FS US $ 300 m, Bank of China US $ 300 m, the Industrial and Commercial Bank of China US $ 200 m, and ADB US $ 50 m, according to SMEC.
Meanwhile, political risk insurance is being sought from ADB, the China Export and Credit Insurance Corporation (Sinosure) and the Multilateral Investment Guarantee Agency (MIGA) of the World Bank. The project will be run by a company registered in Hong Kong.
Apart from ownership of equity shares, CMEC has been awarded the Plan, Design, and Build contract for the project.
Ninety percent of power generated from the project will be traded to India by PTC India Ltd, with which SMEC signed a 25-year Power Purchase Agreement in October 2003. Nepal will get the rest of the generated power as royalty.
According to SMEC, the construction of the project is expected to take 5.5 years, during which time an estimated US $ 225 million will be injected into Nepal's economy.
The project to be constructed in Doti district in Far Western Nepal will displace some 1,650 families from its reservoir area to the terai, while another 350 households within the transmission line area will also be affected, some of them needing relocation to adjacent land.
West Seti is designed to export power to northern India, where the peaking power deficit is estimated at about 12 percent.
eKantipur.com, 19-May-07
BY BIKASH SANGRAULA
After the end of this year's monsoon, the country's biggest ever infrastructure project, the 750-megawatt West Seti, will begin construction. But more than the size or cost (US $ 1.25 billion), it is the scale of international involvement that makes this project stand out among development ventures undertaken in Nepal.
The project has the involvement of four countries and two international banks in areas including investment, construction, insurance, transmission and consumption.
Australia's Snowy Mountain Engineering Corp (SMEC) took a decade to bring the storage-type project to the construction stage since signing a Project Agreement with the government of Nepal in June 1997 to develop and operate the project for 30 years.
"West Seti is a project that has been subject to particularly rigorous international analysis and review," said Bob Scott, SMEC chairman.
According to SMEC, the project will be owned by Chinese, Australian and Indian investors, apart from the government of Nepal and the Asian Development Bank (ADB).
A statement issued by SMEC after a shareholders' meeting in Kathmandu last week said that 26 percent of equity shares for the project will be owned by SMEC, and 15 percent each by China National and Machinery Import and Export Corporation (CMEC), ADB, the government of Nepal, and India's Infrastructure Leasing and Financial Services (IL&FS). Holders of the remaining 14 percent of shares will be finalized soon.
Similarly, on the debt financing side, China Exim Bank is investing US $ 400 m, IL&FS US $ 300 m, Bank of China US $ 300 m, the Industrial and Commercial Bank of China US $ 200 m, and ADB US $ 50 m, according to SMEC.
Meanwhile, political risk insurance is being sought from ADB, the China Export and Credit Insurance Corporation (Sinosure) and the Multilateral Investment Guarantee Agency (MIGA) of the World Bank. The project will be run by a company registered in Hong Kong.
Apart from ownership of equity shares, CMEC has been awarded the Plan, Design, and Build contract for the project.
Ninety percent of power generated from the project will be traded to India by PTC India Ltd, with which SMEC signed a 25-year Power Purchase Agreement in October 2003. Nepal will get the rest of the generated power as royalty.
According to SMEC, the construction of the project is expected to take 5.5 years, during which time an estimated US $ 225 million will be injected into Nepal's economy.
The project to be constructed in Doti district in Far Western Nepal will displace some 1,650 families from its reservoir area to the terai, while another 350 households within the transmission line area will also be affected, some of them needing relocation to adjacent land.
West Seti is designed to export power to northern India, where the peaking power deficit is estimated at about 12 percent.
Saturday, May 12, 2007
What Nepal gets from Arun III, Upper Karnali?
What Nepal gets from Arun III, Upper Karnali?
eKantipur.com, 6-May-07
BY BIKASH SANGRAULA
Should the Interim Parliament's Natural Resources and Means Committee favorably conclude its ongoing inquisition on "suspected lapses" in recommendations made for license award of the 402 MW Arun III and 300 MW Upper Karnali projects, what exactly will Nepal get from the developer of these projects?
Furthermore, what conditions has the government set for the developer?
The recommendation report, submitted by a high-level government committee to the Ministry of Water Resources on April 27, a copy of which has been obtained by the Post, answers this and many other queries.
Based on nearly two dozen parameters approved by the ministry, the committee has recommended India's GMR Energy Ltd for both the projects.
The evaluation committee has given GMR 96 percent points for Upper Karnali and 92.70 percent for Arun III. GMR's closest rival in the former is KSK Electricity Financing Pvt Ltd, India, which scored 93 percent, while its closest competitor in the latter is Sutlej Jal Vidhyut Nigam, India, which scored 83 percent.
Benefits to Nepal
A detailed look at the 14 proposals for Upper Karnali and nine proposals for Arun III reasonably establishes GMR's offers as the most attractive for both project. They are also far better than past deals in projects, sought to be developed in a similar model, like the 750 MW West Seti, where Nepal is offered only 10 percent free energy.
GMR's financial worth and funding commitments for the two projects, mentioned in the report, look promising.
GMR has offered Nepal 33 percent free equity in Upper Karnali, apart from 7.5 percent free energy. It has sought 2.5 years for conducting preparatory works for the project, and another 4.5 years for construction. GMR has proposed to finance the project on a 75:25 debt-equity ratio.
Similarly, in Arun III, GMR has offered Nepal 15 percent free energy in the first 15 years of operation, and 10 percent in the remaining license period. It has sought 2.75 years for preparatory work and 7 years for project construction.
For both the projects, GMR has submitted letters of commitment from UTI Bank and Standard Chartered Bank, and has proposed to sell power to India through PTC India Ltd.
GMR, which is listed in BSE & NSE ITD in India as well as in the Thai Stock Exchange, has the experience of building the 1070 MW Nam Theun II Hydroelectric Project worth US $ 1.1 billion as well as the 388.5 MW Vemagiri Power Project, according to the report.
Nepal's terms and conditions
Both the export-oriented projects are to be implemented on Build Operate Own and Transfer (BOOT) model for a period of 30 years including the construction period, according to Nepal's hydropower policy 2001. After the period, total ownership of the projects should be handed over to Nepal.
Apart from free power, Nepal retains rights to purchase 10 percent of power generated by the projects for internal consumption, if needed. Additionally, before issuing generation license, the government may demand a bank guarantee of a nominal Rs 10,000 per MW, to ensure that the developer does not walk away from the project.
eKantipur.com, 6-May-07
BY BIKASH SANGRAULA
Should the Interim Parliament's Natural Resources and Means Committee favorably conclude its ongoing inquisition on "suspected lapses" in recommendations made for license award of the 402 MW Arun III and 300 MW Upper Karnali projects, what exactly will Nepal get from the developer of these projects?
Furthermore, what conditions has the government set for the developer?
The recommendation report, submitted by a high-level government committee to the Ministry of Water Resources on April 27, a copy of which has been obtained by the Post, answers this and many other queries.
Based on nearly two dozen parameters approved by the ministry, the committee has recommended India's GMR Energy Ltd for both the projects.
The evaluation committee has given GMR 96 percent points for Upper Karnali and 92.70 percent for Arun III. GMR's closest rival in the former is KSK Electricity Financing Pvt Ltd, India, which scored 93 percent, while its closest competitor in the latter is Sutlej Jal Vidhyut Nigam, India, which scored 83 percent.
Benefits to Nepal
A detailed look at the 14 proposals for Upper Karnali and nine proposals for Arun III reasonably establishes GMR's offers as the most attractive for both project. They are also far better than past deals in projects, sought to be developed in a similar model, like the 750 MW West Seti, where Nepal is offered only 10 percent free energy.
GMR's financial worth and funding commitments for the two projects, mentioned in the report, look promising.
GMR has offered Nepal 33 percent free equity in Upper Karnali, apart from 7.5 percent free energy. It has sought 2.5 years for conducting preparatory works for the project, and another 4.5 years for construction. GMR has proposed to finance the project on a 75:25 debt-equity ratio.
Similarly, in Arun III, GMR has offered Nepal 15 percent free energy in the first 15 years of operation, and 10 percent in the remaining license period. It has sought 2.75 years for preparatory work and 7 years for project construction.
For both the projects, GMR has submitted letters of commitment from UTI Bank and Standard Chartered Bank, and has proposed to sell power to India through PTC India Ltd.
GMR, which is listed in BSE & NSE ITD in India as well as in the Thai Stock Exchange, has the experience of building the 1070 MW Nam Theun II Hydroelectric Project worth US $ 1.1 billion as well as the 388.5 MW Vemagiri Power Project, according to the report.
Nepal's terms and conditions
Both the export-oriented projects are to be implemented on Build Operate Own and Transfer (BOOT) model for a period of 30 years including the construction period, according to Nepal's hydropower policy 2001. After the period, total ownership of the projects should be handed over to Nepal.
Apart from free power, Nepal retains rights to purchase 10 percent of power generated by the projects for internal consumption, if needed. Additionally, before issuing generation license, the government may demand a bank guarantee of a nominal Rs 10,000 per MW, to ensure that the developer does not walk away from the project.
Saturday, April 28, 2007
GMR Group suggested for Arun III, Upper Karnali
Budhi Gandaki shelved, GMR Group suggested for Arun III, Upper Karnali
eKantipur.com, 27-April-2007
BY BIKASH SANGRAULA
A committee constituted by the Ministry of Water Resources (MoWR) in October last year to evaluate the proposals of 14 companies interested in developing the 600 MW Budhi Gandaki, 402 MW Arun III and 300 MW Upper Karnali hydroelectric projects, has recommended India's GMR Group for both Arun III and Upper Karnali, sources said.
However, none of the companies that applied for Budhi Gandaki have been recommended for license award, as all the applications were ajudged sub-standard.
The committee, which is coordinated by former finance secretary Bhanu Prasad Acharya, submitted its recommendation to Minister of State for Water Resources Gyanendra Bahadur Karki Friday afternoon.
Sources close to the developments said that the five-member committee allotted points to each of the applications on the basis of 20 different parameters, including free energy and free equity offered to Nepal, financial capability, experience, royalty and construction deadline.
"Based on these parameters, GMR's proposal was judged the best for both Arun III and Upper Karnali," a source said. "Proposals made by KSK Electricity Finance India Ltd and Sutlej Jalbidhyut Nigam were judged second best for Upper Karnali and Arun III respectively," the source added.
Sources said GMR has offered substantial free equity and nominal free energy to Nepal for Upper Karnali. "The government had asked for free equity for Upper Karnali, as the project is listed in Nepal Electricity Authority's generation plan," a source said. Meanwhile, for Arun III, which does not feature in the state electricity body's generation plan, GMR has offered substantial free energy and nominal free equity.
The recommended company, upon being awarded project survey licenses by the government, will be required to produce bank guarantees that would be forfeit if the awarded projects are not completed on time. Under government policy, total ownership of the projects must be handed over to Nepal 30 years after the issue of license.
GMR Group, which entered India's power sector more than a decade ago after the sector was opened up for private investment, has three power plants in operation in India. They are GMR Energy Ltd in Mangalore, GMR Power Corporation Pvt Ltd in Chennai and Vemagiri Power Generation Ltd in Andhra Pradesh.
Three more power projects, also owned by the group, are being development. They are GMR Badrinath Hydro Power Generation Pvt Ltd in Alaknanda, Uttarakhand, Kamalanga Power Project in Orissa and Talong Power Project in Arunachal Pradesh, according to the company's official website.
Fourteen companies, namely Reliance Energy, GMR Energy, Jindal Steel and Power Ltd, Sutlej Jalbidhyut Nigam, Maytas NCC Consortium India, Jayprakash Associates, Larson and Tourbo, Bhilwara Energy Ltd India, National Hydroelectric Project Corporation of India Ltd, KSK Electricity Finance India Ltd, Athena Consortium, Brackel Corporation Netherlands, Sino Hydro Corporation and China National Oversees Engineering Corporation had applied for one or more of the three projects.
Reliance Energy and Jindal Steel and Power Ltd were close in the race, sources said.
Arun III and Upper Karnali are two of the most attractive run-of-river projects in the country. Both are meant for power export to India.
The committee has as members former chief of the Department of Electricity Development Lekh Man Singh Bhandari, Water and Energy Commission Secretariat chief Rajendra Kishore Chhettri, and Nepal Electricity Authority chief Arjun Kumar Karki. MoWR joint-secretary Anup Kumar Upadhyay is member-secretary of the committee.
eKantipur.com, 27-April-2007
BY BIKASH SANGRAULA
A committee constituted by the Ministry of Water Resources (MoWR) in October last year to evaluate the proposals of 14 companies interested in developing the 600 MW Budhi Gandaki, 402 MW Arun III and 300 MW Upper Karnali hydroelectric projects, has recommended India's GMR Group for both Arun III and Upper Karnali, sources said.
However, none of the companies that applied for Budhi Gandaki have been recommended for license award, as all the applications were ajudged sub-standard.
The committee, which is coordinated by former finance secretary Bhanu Prasad Acharya, submitted its recommendation to Minister of State for Water Resources Gyanendra Bahadur Karki Friday afternoon.
Sources close to the developments said that the five-member committee allotted points to each of the applications on the basis of 20 different parameters, including free energy and free equity offered to Nepal, financial capability, experience, royalty and construction deadline.
"Based on these parameters, GMR's proposal was judged the best for both Arun III and Upper Karnali," a source said. "Proposals made by KSK Electricity Finance India Ltd and Sutlej Jalbidhyut Nigam were judged second best for Upper Karnali and Arun III respectively," the source added.
Sources said GMR has offered substantial free equity and nominal free energy to Nepal for Upper Karnali. "The government had asked for free equity for Upper Karnali, as the project is listed in Nepal Electricity Authority's generation plan," a source said. Meanwhile, for Arun III, which does not feature in the state electricity body's generation plan, GMR has offered substantial free energy and nominal free equity.
The recommended company, upon being awarded project survey licenses by the government, will be required to produce bank guarantees that would be forfeit if the awarded projects are not completed on time. Under government policy, total ownership of the projects must be handed over to Nepal 30 years after the issue of license.
GMR Group, which entered India's power sector more than a decade ago after the sector was opened up for private investment, has three power plants in operation in India. They are GMR Energy Ltd in Mangalore, GMR Power Corporation Pvt Ltd in Chennai and Vemagiri Power Generation Ltd in Andhra Pradesh.
Three more power projects, also owned by the group, are being development. They are GMR Badrinath Hydro Power Generation Pvt Ltd in Alaknanda, Uttarakhand, Kamalanga Power Project in Orissa and Talong Power Project in Arunachal Pradesh, according to the company's official website.
Fourteen companies, namely Reliance Energy, GMR Energy, Jindal Steel and Power Ltd, Sutlej Jalbidhyut Nigam, Maytas NCC Consortium India, Jayprakash Associates, Larson and Tourbo, Bhilwara Energy Ltd India, National Hydroelectric Project Corporation of India Ltd, KSK Electricity Finance India Ltd, Athena Consortium, Brackel Corporation Netherlands, Sino Hydro Corporation and China National Oversees Engineering Corporation had applied for one or more of the three projects.
Reliance Energy and Jindal Steel and Power Ltd were close in the race, sources said.
Arun III and Upper Karnali are two of the most attractive run-of-river projects in the country. Both are meant for power export to India.
The committee has as members former chief of the Department of Electricity Development Lekh Man Singh Bhandari, Water and Energy Commission Secretariat chief Rajendra Kishore Chhettri, and Nepal Electricity Authority chief Arjun Kumar Karki. MoWR joint-secretary Anup Kumar Upadhyay is member-secretary of the committee.
Govt decides to invest in West Seti
Govt decides to invest in West Seti, Construction after monsoon
eKantipur.com, 25-April-2007
BY BIKASH SANGRAULA
A cabinet meeting Wednesday approved a proposal made by the Asian Development Bank (ADB), which ws forwarded by the Ministry of Finance, for the government's equity participation of US $ 45 million in the 750 megawatt (MW) West Seti project. ADB is extending the sum as loan to the government.
"The cabinet has approved the proposal," said State Minister for Water Resources Gyanendra Bahadur Karki. "With this decision, the project, whose license was issued 12 years ago, has reached conclusion. It will enter construction after two or three months," Karki added.
ADB will charge the London Interbank Offered Rate (LIBOR) on the loan plus minimum percentage points, providing a concession on percentage points that it normally charges above the LIBOR rate. The government itself will loan out the sum to Nepal Electricity Authority (NEA), which will own shares of the project. The government charges a loan interest of eight percent to NEA.
The project's developers aim to start its construction immediately after monsoon this year. "We aim to make shareholding decisions next month, and seal financial closure by the end of monsoon, after which we aim to start construction," said Himalaya B Pande, director of SMEC West Seti Hydroelectric Corporation Ltd.
ADB, which will itself have a separate equity participation worth 20 percent through its private sector window in the US $ 1.2 billion project, had made the proposal to the government to win over Chinese investors, who are set be the biggest investors in the project. The project is being financed on a 75/25 debt/equity ratio, with most of the debt contribution sought from Chinese financial institutions, including Export Import Bank of China and Bank of China.
The project will also have equity participation of 25 to 30 percent from Australia's Snowy Mountain Engineering Corp (SMEC), which holds the project's generation license. China National Machinery and Equipment Import and Export Corporation (CMEC) that will build the project, and some Indian agencies will also have equity participation. A company is soon being registered in Hong Kong to run the project.
SMEC has an agreement for providing 10 percent royalty to the Nepal government, in the form of 75 megawatts of peaking power from the storage project.
The peaking station of the storage project is targeted to stabilize the power grid in northern India, which faces a tremendous shortage of peaking power. SMEC, which obtained license for the West Seti project in 1994, has a Power Purchase Agreement with PTC India Ltd at around five cents per unit.
West Seti project site lies in Doti district in far-western Nepal, some 865 km from Kathmandu. The project's construction is estimated to take five-and-a-half years. All studies needed prior to project construction have been completed.
eKantipur.com, 25-April-2007
BY BIKASH SANGRAULA
A cabinet meeting Wednesday approved a proposal made by the Asian Development Bank (ADB), which ws forwarded by the Ministry of Finance, for the government's equity participation of US $ 45 million in the 750 megawatt (MW) West Seti project. ADB is extending the sum as loan to the government.
"The cabinet has approved the proposal," said State Minister for Water Resources Gyanendra Bahadur Karki. "With this decision, the project, whose license was issued 12 years ago, has reached conclusion. It will enter construction after two or three months," Karki added.
ADB will charge the London Interbank Offered Rate (LIBOR) on the loan plus minimum percentage points, providing a concession on percentage points that it normally charges above the LIBOR rate. The government itself will loan out the sum to Nepal Electricity Authority (NEA), which will own shares of the project. The government charges a loan interest of eight percent to NEA.
The project's developers aim to start its construction immediately after monsoon this year. "We aim to make shareholding decisions next month, and seal financial closure by the end of monsoon, after which we aim to start construction," said Himalaya B Pande, director of SMEC West Seti Hydroelectric Corporation Ltd.
ADB, which will itself have a separate equity participation worth 20 percent through its private sector window in the US $ 1.2 billion project, had made the proposal to the government to win over Chinese investors, who are set be the biggest investors in the project. The project is being financed on a 75/25 debt/equity ratio, with most of the debt contribution sought from Chinese financial institutions, including Export Import Bank of China and Bank of China.
The project will also have equity participation of 25 to 30 percent from Australia's Snowy Mountain Engineering Corp (SMEC), which holds the project's generation license. China National Machinery and Equipment Import and Export Corporation (CMEC) that will build the project, and some Indian agencies will also have equity participation. A company is soon being registered in Hong Kong to run the project.
SMEC has an agreement for providing 10 percent royalty to the Nepal government, in the form of 75 megawatts of peaking power from the storage project.
The peaking station of the storage project is targeted to stabilize the power grid in northern India, which faces a tremendous shortage of peaking power. SMEC, which obtained license for the West Seti project in 1994, has a Power Purchase Agreement with PTC India Ltd at around five cents per unit.
West Seti project site lies in Doti district in far-western Nepal, some 865 km from Kathmandu. The project's construction is estimated to take five-and-a-half years. All studies needed prior to project construction have been completed.
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