West Seti completion to be delayed by two more years

The Investment Board said that the 750-MW West Seti Hydropower Project will be delayed by two more years to 2021 as the developer has demanded changes in rehabilitation and resettlement modality of the project.
The CWE Investment – a subsidiary of power developer China Three Gorges Corporation (CTGC) – that is developing the project has recently asked the government to help land acquisition and resettlement,” said Investment Board chief executive Radhes Pant, during an interaction organised by GP Koirala Foundation here today. “Though, it had agreed to carry out land acquisition and resettlement, itself,” he said, adding that the government will have to change the law to address the request of the Chinese investor. “It will take some more time as the domestic law do not allow such changes.”
The law of the land needs to be changed, if the government takes over the responsibility of acquiring land and managing resettlement, Pant added.
The existing Land Acquisition Act 1894 reads that the government shall provide the land, if it is under its ownership, while the private developer has to acquire the land on its own for any project development.
The CWE has demanded one-and-a-half years to complete the project from earlier schedule of 2019 due to difficulties in land acquition and resettlement.
However, energy secretary Bishwo Prakash Pandit, on the occasion, said that the government is ready to help the developer in land acquisition and resettlement. “But the investor will have to bear the cost,” he added.

Likewsie, energy minister Umakant Jha, stressed on early completion of the project to end the current power crisis. “The government will make revise the law, if necessary, for the project implementation,” he added.

According to the memorandum between Ministry of Energy and the Chinese company CWE Investment on March 1, 2012, the project was planned to start from July 2014 and completed by 2019.

Likewise, the revised memorandum signed between the IBN and CWE on August 27, 2012 also accepted the time frame and given Chinese company an additional six months compensation time to make up for the time lost due to the investigation of parliamentary committee for natural resources.

According to the agreement between the Board and CWE Investment, the 10 per cent equity will be offered to the locals, apart from 150 MW of electricity to in the far West and multipurpose benefits. The agreement has also explored new possibilities of developing an industrial hub in the Far West with assistance from CTGC.

The Board will hold a meeting with the Chinese investors soon, Pant said, adding that they will discuss problems in land acquisition and resettlement, optimitisation of the project – making it a multipurpose one – and to hold studies on seismic condition of the project site.
Earlier, an Australian company Snowy Mountains Energy Corporation (SMEC) had conducted study but a separate seismological studies need to be done to ensure safety of the project area.

The Board and CWE Investment – that has invited the Board to come to China for discussion – has not yet signed a power development agreement (PDA), though the CWE had completed technical evaluation of the project on March 8 and financial evaluation on July 30.

However, Chinese ambassador to Nepal Wu Chuntai, on the occasion, claimed that the West Seti project is a milestone for Nepal-China relationship and Chinese government and the CWE were fully committed to realise it.

China has agreed to provide $1.6 billion loan for the project development.

Nepal seeks more deals on hydropower

Nepal has extended a warm welcome to more Chinese hydropower companies to invest in projects worth $400 billion, following the approval of a $1.8 billion contract to China Three Gorges Corp for West Seti Hydropower.
"In terms of capital, nobody can compete with China," constituent assembly member and enterpreneur Binod Chaudhary said here on the sidelines of the Boao Forum for Asia in Hainan province today. "The biggest opportunity for Chinese companies in Nepal is to build projects in the same manner as the West Seti project."
The government has just approved Three Gorges Corp to undertake the $1.8 billion West Seti River hydropower project. The 750-megawatt (MW) plant has opened a 'complete new chapter' for Chinese investment in its neighbouring country, Chaudhary said. "China Datang Corporation, a State-owned power company, has also shown an interest in Nepal's hydropower sector," according to convener of the energy development council under the Confederation of Nepalese Industries (CNI) Sujit Acharya.
Nepal, which borders China and India, is reeling under acutely power shortage leading to higher cost of production of the domestic manufacturing companies.Compared with the 20,000-MW-capacity of untapped water resources, the country only has a generating capacity of 650 MW, according to Chaudhary. With no public bidding for the West Seti project, there was great debate over whether the Nepal government should have called for a competitive tender, Chaudhary said, adding that other procurement models for future hydropower projects will be introduced.
The Export-Import Bank of China will provide loans of $1.8 billion for a period of 10 years for the project, in which Three Gorges Corp will hold 75 per cent equity, and the Nepal Electricity Authority (NEA) the remainder.
The hydroelectric dam is expected to start construction in 2015 and could be in operation as soon as 2020, he said, adding that some of the electricity generated by the West Seti plant could be supplied to China, as Nepal was unlikely to absorb all the power, given the small size of the country.
Three Gorges Corp's rivals, including Sinohydro Corp, are also building hydropower plants in Nepal, but private companies from Europe and India are the major investors in the sector.
Chaudhary allayed concern that local residents may oppose the West Seti project because of environmental damage. Local people showed a very positive attitude, believing it would improve the area's infrastructure and living standards, he said.