Two Chinese and a Nepali company joined hands to develop Tamakoshi 3 hydropower project, after a Norwegian company backed out from it some three years ago.
China's YEIG International, Shanghai Investigation, Design and Research Institute (Sidri) and TBi Holdings have signed a framework agreement today to invest around $500 million to develop the project, after Norwegian utility Statkraft backed out of the hydel project failing to search market out of Nepal.
YEIG International – a Chinese government company based in Yunan province – that has developed energy projects in many countries including in South East and South Asia, Sidri – yet another Chinese government company that has developed some 22,000 MW of energy – and TBi Holdings – promoted by Non-Resident Nepali Association (NRNA) president Bhaban Bhatta – inked a joint venture development framework in the presence of the energy minister Barsha Man Pun and vice governor of Yunnan Province Zhang Guohua, along with Chinese bureaucrats, in Kathmandu today.
Pun, on the occasion, said that cooperation can bring experiences achieved by Yunnan in the field of hydropower to Nepal. Expressing best wishes to the joint venture, he said that the hydel project can work as a symbol of friendship and cooperation in the hydropower sector between the two countries.
Noting that Yunnan Province is an important green energy base and electricity relay hub, the vice governor Zhang, on the occasion, said that the signing of cooperation document will encourage more cooperation and exchanges in hydropower. “In 2018 alone, trade between Yunnan Province and Nepal amounted to $10 million, a growth rate of 341 per cent compared to a year ago.”
If everything goes as planned, the much-delayed hydropower project is expected be started in early 2020 and will be completed in three and half years, Bhatta said, adding that the project can be a milestone in the Sino-Nepal relations.
The framework agreement has has also in-principle jointly pledged $500 million for the project, Bhatta informed, adding that the company is yet to finalise the detailed studies and designs of the power plant that has been in news for last one decade for all the wrong reasons.
Though, Xinhua – a Chinese government media – reported that the project is being developed with an installed capacity of 200 MW, Bhatta clarified that the capacity will be confirmed only after the survey and wider consultation between the ministry and Nepal Electrictity Authority (NEA).
TBi Holdings had received the license from the Department of Electricity Development on October 12, 2017. According to the licensing provision, it had to complete the survey in two years.
Statkraft also left the project because, according to the government policy, no one can construct the project with installed capacity of 650 MW for domestic consumption. According to the policy, the Nepal Electricity Authority (NEA) – the sole buyer of the power generated by all the developers – will not sign Power Purchase Agreement (PPA) in Q20 design in which Statekraft was planning to develop 650 MW. The NEA will sign PPA with developer only in Q40 design that will further reduce the installed power of the project between 315 MW and 220 MW.
The dispute of project’s actual installed power has also created tussle between the Investment Board-Nepal (IBN) – that looks after the hydropower projects above 500 MW – and the Department of Electricity Development under Energy Ministry. The department looks after the power projects under 500 MW.
The dispute also took nasty turn as the department awarded the power generation licence to the TBi Holdings, and not the board as it had put the project in its basket exercising its rights over hydel projects above 500 MW. The board had earlier planned to develop Tamakoshi 3 under a public-private-partnership (PPP) model with a mix of domestic and international investment. The board was also planning to go for global competitive bidding in 2018. However, the department under the Energy Ministry – in October 2017 – issued a survey licence to TBi Holdings, a day after the company filed an application at the department, before the board could execute its plan.
An anti-corruption crusader moved to Supreme Court accusing Energy Ministry of violating the Public Procurement Act, Investment Board Act, Good Governance Act and other constitutional provisions by awarding the survey licence directly to TBi Holdings, and also seeking the suspension of the licence as it was awarded without competitive bidding and also encroaching the Investment Board’s right. Acting on a writ seeking a stay order against the government’s decision to award the project to TBi Holdings, the Supreme Court ordered the government to suspend the survey licence issued to TBi Holdings. But, the Supreme Court – after a month of its preliminary stay order – quashed its order paving the way for TBi Holdings to go ahead with the preparatory studies to develop the project.
China's YEIG International, Shanghai Investigation, Design and Research Institute (Sidri) and TBi Holdings have signed a framework agreement today to invest around $500 million to develop the project, after Norwegian utility Statkraft backed out of the hydel project failing to search market out of Nepal.
YEIG International – a Chinese government company based in Yunan province – that has developed energy projects in many countries including in South East and South Asia, Sidri – yet another Chinese government company that has developed some 22,000 MW of energy – and TBi Holdings – promoted by Non-Resident Nepali Association (NRNA) president Bhaban Bhatta – inked a joint venture development framework in the presence of the energy minister Barsha Man Pun and vice governor of Yunnan Province Zhang Guohua, along with Chinese bureaucrats, in Kathmandu today.
Pun, on the occasion, said that cooperation can bring experiences achieved by Yunnan in the field of hydropower to Nepal. Expressing best wishes to the joint venture, he said that the hydel project can work as a symbol of friendship and cooperation in the hydropower sector between the two countries.
Noting that Yunnan Province is an important green energy base and electricity relay hub, the vice governor Zhang, on the occasion, said that the signing of cooperation document will encourage more cooperation and exchanges in hydropower. “In 2018 alone, trade between Yunnan Province and Nepal amounted to $10 million, a growth rate of 341 per cent compared to a year ago.”
If everything goes as planned, the much-delayed hydropower project is expected be started in early 2020 and will be completed in three and half years, Bhatta said, adding that the project can be a milestone in the Sino-Nepal relations.
The framework agreement has has also in-principle jointly pledged $500 million for the project, Bhatta informed, adding that the company is yet to finalise the detailed studies and designs of the power plant that has been in news for last one decade for all the wrong reasons.
Though, Xinhua – a Chinese government media – reported that the project is being developed with an installed capacity of 200 MW, Bhatta clarified that the capacity will be confirmed only after the survey and wider consultation between the ministry and Nepal Electrictity Authority (NEA).
TBi Holdings had received the license from the Department of Electricity Development on October 12, 2017. According to the licensing provision, it had to complete the survey in two years.
Statkraft had initially designed Tamakoshi 3 for 880 MW but the project was not feasible as it could submerge Sukute Bazar – a popular market settlement along the Tamakoshi river – forcing the Norwegian company to reduce the installed capacity of the the project to 650 MW. The Statkraft and its Indian partner Tata Power had planned to sell the power to India but their plan could not be materialised as then Nepal and Indian had not entered into the Power Trading Agreement (PTA), and the Tata Power also backed out of the project citing technical reason.
The government and Statkraft had entered into an agreement – in 2007 – to build the Tamakoshi 3. Statkraft had also investment Rs 1 billion in survey for the 650 MW plant. However, the Norwegian company dropped its plans to construct the export-oriented project due to disturbing political situation – that led to back out of Tata Power – between Nepal and India after the 2015 economic blockade.Statkraft also left the project because, according to the government policy, no one can construct the project with installed capacity of 650 MW for domestic consumption. According to the policy, the Nepal Electricity Authority (NEA) – the sole buyer of the power generated by all the developers – will not sign Power Purchase Agreement (PPA) in Q20 design in which Statekraft was planning to develop 650 MW. The NEA will sign PPA with developer only in Q40 design that will further reduce the installed power of the project between 315 MW and 220 MW.
The dispute of project’s actual installed power has also created tussle between the Investment Board-Nepal (IBN) – that looks after the hydropower projects above 500 MW – and the Department of Electricity Development under Energy Ministry. The department looks after the power projects under 500 MW.
The dispute also took nasty turn as the department awarded the power generation licence to the TBi Holdings, and not the board as it had put the project in its basket exercising its rights over hydel projects above 500 MW. The board had earlier planned to develop Tamakoshi 3 under a public-private-partnership (PPP) model with a mix of domestic and international investment. The board was also planning to go for global competitive bidding in 2018. However, the department under the Energy Ministry – in October 2017 – issued a survey licence to TBi Holdings, a day after the company filed an application at the department, before the board could execute its plan.
An anti-corruption crusader moved to Supreme Court accusing Energy Ministry of violating the Public Procurement Act, Investment Board Act, Good Governance Act and other constitutional provisions by awarding the survey licence directly to TBi Holdings, and also seeking the suspension of the licence as it was awarded without competitive bidding and also encroaching the Investment Board’s right. Acting on a writ seeking a stay order against the government’s decision to award the project to TBi Holdings, the Supreme Court ordered the government to suspend the survey licence issued to TBi Holdings. But, the Supreme Court – after a month of its preliminary stay order – quashed its order paving the way for TBi Holdings to go ahead with the preparatory studies to develop the project.
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