Laxmi Capital News
Chinese company agrees to finance hydel project in Nepal

Chinese government holding company Chongqing Water TurbineWorks Co ltd (CWTW) has agreed to develop hydro-power project on financingmodality in cooperation with Nepali private sector in Nepal.

Financing modality contract agreement between CWTW and PeoplesEnergy ltd in Nepal was signed in China on March 14 and will be formallyexchanged at a ceremony in Nepal before May.

Engineering, Procurement and Construction (EPC) model hasbeen implemented in Nepal by Chinese and other foreign companies but thefinancing modality has been agreed on for the first time in Nepal, said PeoplesEnergy ltd Chairperson Krishna Acharya.

“Contractor, equipment, manpower and 90 percent of capitalwill be provided by the Chinese company and the money will be paid back 700 daysafter commercial operation of power plant begins,” Acharya said.

According to Acharya, CWTW will invest $88 million in the48.8 megawatt Khimti II Projects in Ramechhap and Dolakha districts, theconstruction of which will start in April. The project is expected to generate electricity commercially from July, 2021.

“We are to provide 10 per cent money in the first phase inApril,” Acharya said.

According to Acharya, Nepali company has already securedloan from Sanima Bank to pay the Chinese company.

The project is expected to earn revenue worth Rs 1.40billion in the first year of operation. Likewise, the revenue is expected toreach Rs 1.74 billion in the 9th year of operation as per the Peoples EnergyCompany’s statement released today.

Both parties reached an understanding after series ofmutual discussion with developers, investors, consultants and otherstakeholders in Chongqing and Kathmandu, said Acharya.

“After series of technical and financial discussions andnegotiations about construction of hydro-power project on EPC and financingmodel we found CWTW technically sound and financially strong,” Acharya said.

According to Project Manager Ram Hari Sharma, the height ofthe project is 341 metre and design discharge is 16.11 cubic metre per second.

CWTW is said to start construction in April. It specialisesin manufacturing of hydro-power equipment has supplied equipment to 32provinces/cities in China.

It has also exported equipment to 33 countries includingUS,Canada, Italy, Norway, Vietnam,Peru, Nepal and Burundi.

Source : The Himalayan Times, 25th March 2018

 

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