Laxmi Capital News
Upper Marshyangdi-2 in limbo as talks deferred

Investment Board Nepal (IBN) isstill undecided over the execution of the 600 MW Upper Marshyangdi-2Hydroelectric Project as it is yet start negotiations with a potentialdeveloper to sign the project development agreement (PDA). 

In 2008, Himtal Hydropower Companyreceived the survey licence for the project, and it has done a detailed projectreport (DPR) and environmental impact assessment (EIA). However, the company, asubsidiary of GMR Energy India, has not started PDA talks with IBN.

The board is also not eager to beginPDA negotiations with Himtal Hydropower. It had made preparations to sign aproject negotiation agreement with the company to begin formal PDAnegotiations, but it later dropped the plan. 

“Actually, we don’t want to sign aPDA with the subsidiary of GMR Energy right now,” said an IBN official whorequested not to be named. “Currently, GMR Energy is struggling to arrangefunds to build the 900 MW Upper Karnali Hydropower Project, and it might not bea good idea to award it another project.” 

IBN signed a PDA with GMR for thedevelopment of the Upper Karnali in 2014. As per the PDA, the developer wassupposed to complete financial closure of the project within two years from thedate of signing the PDA. 

IBN has twice given deadline extensionsto GMR, but it has not been able to put together the money to construct theproject. The board has received criticism for being lenient to the Indiancompany by extending the deadline repeatedly.

“Therefore, we will not award thisproject to the Indian developer unless it arranges funds for the constructionof the Upper Karnali Hydropower Project,” said the source. The Post was notable to reach the developer for comments despite repeated attempts. 

Located in Lamjung and Manangdistricts in western Nepal, the Upper Marshyangdi-2 scheme is an exportoriented run-of-the-river project with a peaking capacity of 3.1 hours at theminimum. As per the DPR of the project, the hydropower plant will have fourgenerating units of 150 MW each giving a total installed capacity of 600 MW.The design energy per year is 2282 gigawatt hours, and the construction isexpected to take seven years.

A 400 kV transmission line isrequired to evacuate the energy generated by the project, and the government isyet finalise the route for the construction of the power line. 

Source: The Kathmandu Post, 25thJanuary 2018

 

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