Tuesday, September 6, 2016

PDA with Upper Trishuli soon: Energy Minister Sharma

The government is preparing to sign Project Development Agreement (PDA) with the promoters of the 216 MW Upper Trishuli-1 hydroelectricity project, according to energy minister Janardan Sharma.
Speaking at a forum 'Foreign Direct Investment in Hydropower' jointly organised by International Finance Corporation (IFC), Independent Power Producers’ Association of Nepal (IPPAN) and Nepal Water and Energy Development Company (NWEDC), in the capital today, Sharma said that the PDA for Upper Trishuli-1 will be signed soon.
According to a Energy Ministry, PDA negotiations between the ministry and NWEDC have reached final stages and that the agreement will be signed soon.
NWEDC is a joint venture company with stakes of three Korean companies – Korea South East Power Company (KOSEP), Daelim Industrial Corporation and Kyeryong Construction Industrial Corporation – the IFC and Bikesh Pradhanang, a Nepali investor. The run-of-river type project will generate 216MW electricity through three turbines of 72MW capacity each.
The hydropower project is expected to generate 1456.4 Gigawatt hours of net electricity per year, of which 1149.7 Gigawatt hours would be generated in the wet season and 306.7 Gigawatt hours would be generated in the dry season. The project site is near Dhunche, the headquarters of Rasuwa district.
It is high time for Nepal to attract FDI to exploit its rich water resources, Sharma said, adding that Nepal has both natural and human resources. "What we do not have is enough investment. Therefore, the importance for FDI is very high for Nepal."
Stating that Nepal has already signed a Power Trade Agreement (PTA) with India, a huge market for Nepal’s hydroelectricity, minister Sharma said this agreement is going to encourage FDI in Nepal’s hydropower sector.
Sharma went on to say that it takes years for hydropower promoters to get license and sign Power Purchase Agreement (PPA) and Power Development Agreement (PDA). "This does not encourage the foreign investors,” he added.
Similarly, director general of the Department of Industry Maheshwor Neupane, on the occasion, said that the government has a policy of prioritising the hydro sector for FDI. "FDI in hydropower sector has been increasing, though slowly," he added.
Stating that the Korean government has built fundamental industries and developed Korea’s economy through foreign loans and foreign direct investment, Korean ambassador to Nepal Choe Yong Jin said, “Nepal has one of the largest potentials in generating hydropower. "But such a great potential can only be materialised into reality through investment only," he said, "And this investment is possible through discussions with all the stakeholders and decisiveness and strong will of the leaders."
Envoy Jin expressed hope that the Upper Trishuli-1 Project, which is being developed by the international consortium NWEDC in collaboration with Korea South-East Power (KOSEP) and IFC, will make significant contribution to increasing total hydropower generation of Nepal.
Likewise, on the occasion, chief executive of KOSEP Heo Yup shared Korea’s FDI-funded development story. "Realising that borrowing foreign funds and inviting FDI were essential for infrastructure development, Korean government took various measures to protect foreign capital and, as a result, it attracted large amounts of foreign capital," he said, adding, "As a result, Korea was able to build a base for a sharp economic growth that surprised the whole world."
After 30 years of receiving FDI, he said, Korea became one of the top 10 exporting countries in the world, with its export volume of $2,000 billion. "Now, it is Korea who makes FDI in other countries."
Speaking at the programme, president of Independent Power Producers’ Association Nepal (IPPAN) Khadga Bahadur Bisht said that the policy makers of Nepal should seriously dwell on the FDI. "We have been seeking FDI since 1981. But there have been only a few hydro projects funded through FDI," he said, adding that Nepal hasn’t done well in terms of attracting FDI. "Nepal’s policy makers have to give priority to FDI."
A panel discussion was also held in the second session of the programme. The panel discussion chaired and moderated by former member of National Planning Commission (NPC) Dr Swarnim Wagle included energy secretary Suman Prasad Sharma, IPPAN president Khadga Bahadur Bisht, project manager of PPIB of Pakistan Iqbal Munawar, principal investment officer of IFC Kamal Dorabawila, USAID's energy policy and strategy advisor Michael Boyd as the panelist.

No comments: