IPPAN plans agreements in Power Summit

Independent Power Producers’ Association-Nepal (IPPAN) is going to sign eight agreements with foreign firms and lender companies during the Power Summit scheduled to be held in Kathmandu on November 21-22.
According to the IPPAN, National Hydroelectric Power Corporation, India and Hydroelectricity Investment and Development Company Ltd, Nepal will ink a hydropower development agreement. Likewise, Nepal Power Exchange Ltd and Indian Power Exchange Ltd and Power Cell Bangladesh will also sign an agreement on the occasion.
“Women in Power Forum and International Finance Corporation (IFC), Nepal Bankers’ Association (NBA), IPPAN and Netherlands Development Finance Company (FMO), Investment Board Nepal and Power China will also sign a pact to construct Tamor Reservoir Project,” IPPAN press note reads, adding that the GMR Group of India and Bangladesh will also sign power trade agreement (PTA) of Upper Karnali Hydropower Project.
Some of the agreements are in negotiation phase and will be made public during the summit, according to president of IPPAN Shailendra Guragain, who thinks the summit is expected to create a platform for regional cooperation for power trade through various discussion sessions. The summit is also expected to explore new markets as well as expansion of power trade within and beyond the border.
According to the organiser IPPAN, experts from Nepal, China, India, Bangladesh, Bhutan, Japan, the Netherlands, United States, Canada, and Norway will participate during the two-day event. With the theme ‘Powering the Asian Century’, the summit – being organised under the patronage of Ministry of Energy, Water Resources and Irrigation – witnesses over 700 guests from various countries are expected to participate during the summit.
Guragain said that the experts are scheduled to deliver their deliberations on a number of topics including regional power trade, electricity market, regulation, and financing, sustainable development, execution and facilitation of the energy projects in the federal structure, foreign investment in hydropower and among others.

Chinese, Nepali firms seal deal to develop Tamakoshi 3 hydel project

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 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.

India relaxes cross-border power trading guidelines

India has relaxed the cross border power trading guidelines by giving recognition to the tripartite arrangement in cross-border trading of electricity. The 'Guidelines on Cross Border Trade Import/Export of Electricity' has also paved the way for Nepal to export surplus electricity to Bangladesh via Indian transmission lines.
The Indian Power Ministry – introducing the new guideline – has removed the discriminatory provision included in the older one, under which Nepali-based hydropower projects, which are owned by the Indian government or have a majority (51 per cent) Indian share were only allowed to export power to India.
The new guideline has, however, included a provision under which two countries having a bilateral agreement with the Indian government can trade electricity between them through Indian power lines after entering into agreement with the Indian government owned-Central Transmission Utility.
"Provided that in case of tripartite agreements, the cross border trade of electricity across India shall be allowed under the overall framework of bilateral agreements signed between the Government of India and the Government of respective neighbouring countries of the participating entities," the guideline reads.
"Where tripartite agreement is signed for transaction across India, the participating entities shall sign a transmission agreement with the Central Transmission Utility of India to obtain transmission corridor access," it further reads, adding that it will foster power trade between Nepal and Bangladesh.
While issuing guidelines on cross-border electricity trade for the first time in 2017, the Indian Power Ministry had neglected a possibility of trilateral arrangement among Nepal, India and Bangladesh. But the new guidelines – issued after withdrawing the old one issued in 2017 – provide an opportunity to its neighbouring countries, including Bangladesh and Nepal to trade electricity between them through Indian territory.
The latest guidelines – that is more progressive and has opened plenty of avenues for the development of hydropower sector in Nepal – also follows the spirit of the Power Trade Agreement (PTA) signed between Nepal and India in 2014, which requires both countries to allow non-discriminatory access to cross-border electricity market.
The older guideline was discouraging to foreign investors and private Nepali power developers planning to construct export-oriented hydropower projects.

लगानी र रोजगारी चिन्तक

आफैं अर्थशास्त्री नभए पनि उनलाई देश विकासको लागि पहिला ठूलो लगानी चाहिन्छ भन्ने थाहा थियो। ठूलो लगानी र रोजगारी सिर्जना भयो भनेमात्र देशले आर्थिक विकासमा काँचुली फेर्न सक्छ भन्ने मान्यता राख्ने पूर्व प्रधानमन्त्री तथा नेपाली कांग्रेसका सभापति सुशील कोइरालाकोे २० महिने कार्यकालमा उनकै सक्रिय नेतृत्वमा संविधानसभामार्फत संविधान जारी भएको मात्र धेरैले सम्झन्छन्। नेपाली जनताले आफैंले संविधान बनाउन गरेको ६५ वर्षदेखिको संघर्षको प्रतिफलस्वरुप जारी भएका संविधानको कारण उनलाई सम्झनु स्वाभाविक पनि हो।तर, संविधान आएरमात्र हुन्न, जनताले त्यसको प्रतिफल पाउनुपर्छ भन्ने उनको सोच रहेको राष्ट्रिय योजना आयोगका पूर्वउपाध्यक्ष गोविन्द पोखरेल बताउँछन्। राष्ट्रिय योजना आयोगका अध्यक्ष प्रधानमन्त्री हुने प्रचलन अनुसार कोइराला पोखरेलका अध्यक्ष थिए।

धेरैले सरल जीवनशैली तथा प्रजातन्त्रप्रतिको एकोहोरो लगावका कारण कोइरालालाई सम्भि्कन्छन्। तर पोखरेलका अनुसार कोइरालाको व्यक्तित्वको अर्को महŒवपूर्ण विकासप्रेमी पाटो भने संविधानको चर्चामा छायाँमा पर्योा।

'देशलाई फाइदा हुने र रोजगारी सिर्जना हुने ठूला आयोजना बन्नुपर्छ भन्ने उहाँको मान्यताअनुसार विगत २० वर्षदेखि झुन्डिएर रहेको भारतसँगको ऊर्जा विकास सम्झौता (पिटिए) उहाँकै प्रधानमन्त्रीत्वकालमा भयो,' पोखरेल भन्छन्।

कोइरालालाई निर्णय लिने नसक्ने नेताको रुपमा धेरैलै चित्रित गरे पनि देश विकासको लागि भने उनकै नेतृत्वमा दुई अर्ब अमेरिकी डलर लाग्ने ९०० मेगावाटको माथिल्लो कर्णाली र सोही आकारको अरुण ३ को आयोजना विकास सम्झौता भयो।

'कोइरालालाई उपचारको लागि अमेरिका जानु थियो,' पोखरेल सम्झन्छन्, 'तर, उहाँले माथिल्लो कर्णालीको आयोजना विकास सम्झौता (पिडिए) गरेर जाने भन्दै सिंहदरबारमा आफ्नै अगाडि पिडिएमा हस्ताक्षर भएपछि सिधै विमानस्थल गएर अमेरिका उड्नुभयो।' यसबाट पनि कोइरालाको विकासप्रतिको लगाव र गम्भीरता प्रस्ट हुने पोखरेलको भनाइ छ।

२० वर्षदेखि अल्भि्कएर रहेको ५,६०० मेगावाटको पञ्चेश्वर बहुद्देश्यीय आयोजनाको काम पनि उनकै कार्यकालमा फेरि अगाडि बढेको थियो।

विकासबारे सबैका आ–आफ्ना धारणा वा शैली हुन्छन्, कोइरालाको पनि आफ्नै सोच थियो। पोखरेलका अनुसार प्रत्येक भेटमा कोइरालालाई लगानीबारे जानकारी गराउनु पर्थ्यो। हरेक भेटमा कोइरालाको एउटै प्रश्न गर्थे– देशमा लगानी ल्याउन र रोजगारी सिर्जना गर्न के हुँदैछ?

यस्तै, देशलाई कृषिप्रधान भन्ने तर किसानको लागि सरकारले कुनै सहुलियत नदिँदा भारतीय कृषि उत्पादनसँग प्रतिस्पर्धा गर्न नसकेर कृषि पेसाबाट किसान पलायन भइरहेको सन्दर्भमा कोइरालालाई कृषकलाई भारतमा झैं बिनाब्याजको ऋण दिन सकिन्छ कि सकिन्न भन्ने चिन्ता थियो।

बजारमा पानी र दूधको भाउ बराबर भएकोले किसान मर्कामा छन् भन्ने कोइरालालाई थाहा थियो। पोखरेलका अनुसार कोइरालाकै प्रयासमा ६ प्रतिशत ब्याजमा कृषिऋण दिने नीति ल्याइएको हो। कोइराला त बिनाब्याज कृषि ऋण दिनुपर्छ भन्ने मान्यता राख्थे। पोखरेल भन्छन्, 'तर प्राविधिकरुपमा यस्तो सम्भव नभएको कर्मचारीतन्त्रले बताएपछि ६ प्रतिशत ब्याजमा दिइने भएको हो।'

त्यस्तै, कृषिलाई अगाडि बढाउन रासायनिक मल उद्योग स्थापना गर्नुपर्नेमा पनि उनको धेरै चासो थियो। उनकै अध्यक्षतामा बसेको लगानी बोर्डको बैठकले रासायनिक मल उद्योग स्थापनाको लागि अध्ययन गर्न अनुमति दिइसकेको छ।

कोइरालाकै कार्यकालमा नेपालमा ठूलाठूला वैदेशिक लगानीका सिमेन्ट उद्योगका लागि अर्बौं डलरको प्रतिबद्धता आएको पूर्वअर्थमन्त्री तथा नेपाली कांंग्रेसका रामशरण महत बताउँछन्। उनका अनुसार कोइराला औद्योगिक वातावरण निर्माण गरी देशमा ठूलो लगानी भिœयाउन नीतिगत सुधारका पनि सहयोगी थिए।

लगानी बोर्डमार्फत ठूला विदेशी लगानी (एफडिआई) ल्याएर प्रविधि हस्तान्तरणमार्फत देशको विकास गर्नुपर्छ भन्ने उनको मान्यता थियो। यसको लागि नीतिगत सुधार गर्नुपर्नेमा कोइरालाले आफूलाई पूरापूर साथ दिएको महतको भनाइ छ।

यस्तै, कोइरालाको प्रजातन्त्रप्रतिको अटल आस्थाका कारण नेपालका विकास साझेदारहरु पनि उनको कार्यकालमा नेपालमा प्रजातन्त्र र विकासको वातावरण बन्नेमा ढुक्क देखिन्थे। कोइराला कार्यकालको पहिलो आर्थिक वर्षमा नेपालले दुई खर्ब ७० अर्ब २० करोड बराबरको वैदेशिक सहायताको प्रतिबद्धता पाएको थियो। तर, दोस्रो आर्थिक वर्ष सुरु हुनु दुई महिनाअघि वैशाख १२ मा विनाशकारी भुइँचालो गइदियो।

प्रधानमन्त्रीको रुपमा कोइरालाको २० महिने कार्यकालको लगभग अन्तिममा गएको ठूलो भूकम्पले पनि कोइरालालाई अडानबाट हल्लाउन सकेन। कोइरालाकै सहज नेतृत्वको कारण नेपालले वैशाख १२ को भूकम्पपछिको क्षति आंकलन तथा त्यसकै आधारमा पुनर्निर्माणको लागि काठमाडौंमा अन्तर्राष्ट्रिय सम्मेलन गरेर विकास साझेदारबाट चार खर्बभन्दा बढीको प्रतिबद्धता प्राप्त गर्न सफल भएको महत सम्झन्छन्।

यस्तै, मितव्ययितामा पनि कोइराला उत्तिकै चासो राख्थे। संविधान आउला, स्थिरता होला, अनि राजदूत नियुक्त गरौंला भन्ने उनको सोच रहेको पोखरेल बताउँछन्। हाललाई भारत, अमेरिका, युरोप तथा चीनमा राजदूत भए पुग्छ, किन बढी खर्च गर्ने भन्ने उनको सोच अन्य प्रधानमन्त्रीको आफू नियुक्त हुनेबित्तिकै आफ्ना कार्यकर्ता भर्ना सुरु गरिहाल्ने प्रवृत्तिभन्दा फरक थियो। किनकि कोइराला फाल्तु खर्चलाई सकेसम्म निरुत्साहित गर्थे।

नेपाल राष्ट्र बैंकका गभर्नर चिरञ्जीवी नेपालका अनुसार बिपीको आर्थिक विचारबाट प्रभावित सुशीललाई आर्थिक कुरा बुझाउन निक्कै सजिलो थियो। गभर्नर नेपाल कोइराला प्रधानमन्त्री हुँदा उनका आर्थिक सल्लाहकार थिए।

यसरी निजी क्षेत्रलाई माया गर्ने र खुला बजार अर्थतन्त्रले नै देशको विकास गर्न सकिन्छ भन्ने मान्यता राख्ने कोइराला व्यक्तिको आर्थिक स्वतन्त्रताका पक्षपाती थिए। नेपालका अनुसार कोइराला व्यक्तिलाई पैसा कमाउन दिनुपर्छ भन्ने मान्यता राख्थे। कोइराला व्यक्तिले काम गरेर पैसा कमाएर रोजगारी सिर्जना गरोस्, राज्यलाई कर तिरोस् भन्ने मान्यता राख्थे।

कसैले नयाँ लगानीका कुरा गरे उनको पहिलो प्रश्न 'कतिजनाले रोजगारी पाउँछ' भन्ने हुन्थ्यो।

आफूले बोकेको विचार र जीवनशैलीमा ठूलो विरोधाभाष रहेको समूहले देश विकासलाई नै पहिलो प्राथमिकता मान्ने कोइरालाजस्ता स्वच्छ छविका देशभक्त नेतालाई मर्ने बेलामा विभिन्न आरोप पनि लगाए पनि प्रजातन्त्र, खुला बजार र आर्थिक स्वतन्त्रताप्रति कोइरालाको निष्ठा युगयुगसम्म अमर रहने पोखरेल बताउँंछन्।

साम्यवाद स्थापनाको लागि सर्वहाराको नाममा जीवनभर लडेका नेताको जीवनशैली सत्ताको केन्द्र वरिपरि पुग्नासाथ कुनै जमिनदार वा खानदानी राजशाही भन्दा फरक छैन। नेपालका वामपन्थी भनिने नेताकै जीवनशैली उनीहरुले आक्षेप लगाउने पुँजीपतिको भन्दा कम छैन। तर, कोइरालाले आफ्नो सबै सम्पत्ति पार्टीलाई दान गरेरमात्र चित्त बुझाएनन् जीवनभर प्रजातन्त्र मात्र सोचे।

उनको जीवनशैली अनुकरण गर्न सक्ने नेता नेपालले फेरि नपाउन सक्छ। कोइराला महिलाको सामाजिक सुरक्षा तथा विकासबारे पनि चिन्तित थिए। उनले आफ्नो प्रधानमन्त्रीत्वकालमा तराईका २० जिल्लाका मधेसी, जनजाति, पिछडिएका महिलाको लागि नेपाली कांग्रेसका पुराना नेता रामनारायण मिश्रको नाममा छात्रवृत्ति स्थापना गरे।

तैपनि कोइलालाका धेरै राम्रा काम छायाँमा पर्योम। आफैंले संविधान लेख्ने नेपाली जनताको ६५ वर्ष पुरानो सपना पूरा गर्दा कोइरालाका अरु राम्रा कामलाई गौण ठानियो। कामै नगरी प्रचारवाजी गर्ने कार्यशैलीप्रति सादगीका पर्याय कोइरालाले कहिल्यै विश्वास गरेनन्।

Chinese company to develop 750-MW West Seti

A meeting of Investment Board Nepal chaired by Prime Minister Sushil Koirala today approved investment from a Chinese company to develop the 750-megawatt West Seti Hydropower Project.
The project that is estimated to cost Rs 160 billion will now be developed by a joint venture with Nepal Electricity Authority (NEA) and CWE Investment Corporation, a subsidiary of China’s Three Gorges Corporation (TGC). The state power utility, NEA will have 25 per cent in equity, and CWEI will inject investment for the equity and borrow the remaining amount.
The joint venture will conduct geological tests before monsoon for the mega hydropower
project that is going to be constructed in Baitadi, Bajura, Dadeldhura and Doti districts of Far Wester Region, according to the chief executive officer of the Board Radhesh Pant.
Soon after completion of geological and hydrological tests, we will begin negotiations on Project Development Agreement (PDA) with the Chinese company,” he said, adding that the project will start generating power in 2023, if everything goes according to the plan.
Earlier in August 2012, the government had formally handed over the West Seti hydropower project – that was then aimed at domestic consumption – to the CWEI, after a memorandum of understanding was signed between the company and the Board. The board – that looks after mega projects – had then started preliminary negotiation with the project developer. But the NEA was hesitant to seal the deal as it was worried of power surplus by 2017 – as more power producers are generating power lately – whereas the Chinese developer was also not sure of the market, in case of power surplus in Nepal. The state power utility is the sole buyer of electricity developed by all the developers.
However, after Nepal-India Power Trade Agreement (PTA) recently, NEA and the Chinese developer, came near to agreement. The PTA allows both Nepal and India to buy and sell electricity.
The 750-MW project also got back on leak after the visit – in March end – of China Three Gorges Corporation chairman Lu Chun, who met with the premier Koirala to discuss the issues of resettlement and rehabilitation of the displaced families by the project.
The Board has also decided to charge $1,500 per MW in negotiation fee for Power Development Agreement (PDA) as the project is not handed through open bidding like Upper Karnali and Arun III. The developer has to pay the fee either the negotiations become successful or unsuccessful. A seven-member team has been formed under Pant for the negotiation.
The project was envisioned some two decades ago as Snowy Mountain Engineering Corporation (SMEC) had shown interest in developing the project. The first study was also conducted in 1987. The government was however forced to revoke the licence of the Australian company as it failed to start work after repeated renewal.
Meanwhile, the Board also decided to amend the project negotiation agreement for Tamakoshi III hydropower project. The chief executive is authorised for the amendment. It has also decided to form an expert committee to review the amendment.

SAARC nations ink power deal opening regional trade

South Asian countries today signed a last-minute deal to trade electricity among themselves opening opportunities for development of hydropower projects in Nepal.
Before the SAARC summit concluded here in Kathmandu, foreign ministers of all the eight countries signed the SAARC Framework Agreement on Energy Cooperation and Electricity Trade that will boost the investment and trade, apart from a greater regional connectivity.
The deal will also ensure electricity trading through grid connectivity.
Howver, the eight countries failed to sign two pacts – one on motor vehicle and another on railways – that could have increased intra-regional connectivity to fuel trade in the South Asia.
SAARC Energy Center – based in Islamabad of Pakistan had long been doing groundwork – and SAARC energy ministers had finalised the draft framework agreement at a meeting in New Delhi on October 16-17.
The framework provisions South Asian governments to enable their agencies for grid connectivity, policy harmonisation and trading as well as facilitating the supply of electricity to power-deficit cities
The framework agreement comes into effect from today.
After the signing of the agreement of the concluding session, SAARC chair and Prime Minister Sushil Koirala announced that the two pacts which will boost connectivity and encourage people-to-people contact and movement of goods will be approved within three months.
At the end of the two-day 18th SAARC summit – which took place after three years, a 'Kathmandu Declaration' was also adopted. The 'Kathmandu Declaration' recognised that after nearly 30 years of its existence, it was time to "reinvigorate' SAARC's regional cooperation and 'revitalise' the bloc as an effective vehicle to fulfill the developmental aspirations of the people in the region.
The summit declaration also identified trade as a key area with leaders renewing their commitment to achieve South Asian Economic Union in a phase-wise and planned manner through a free trade area, a customs union, a common market, and a common economic and monetary union.
The declaration said the leaders unequivocally condemned terrorism and violent extremism in all its forms and manifestations and underlined the need for effective cooperation among the member states to combat them. The SAARC leaders also directed respective authorities to ensure full and effective implementation of the SAARC Regional Convention on Suppression of Terrorism.
Koirala also declared that the 19th SAARC Summit will be held in Islamabad of Pakistan in 2016.
The SAARC member countries – Afghanistan, Bangladesh, Bhutan, India, Maldives, Nepal, Pakistan and Sri Lanka – host the summit alphabetically every year, though it has been held in three years this time. The two-day SAARC Summit – started yesterday – was attended by Presidents of Afghanistan, Sri Lanka, the Maldives, and Prime Ministers of India, Pakistan, Bangladesh, Nepal and Bhutan.


Nepal to benefit
KATHMANDU: Nepal will benefit from the energy agreements among the SAARC nations. Currently, some Indian companies are giving special interest to invest in the energy sector in Nepal, but Bangladesh has also shown in joint investment in hydropower in Nepal to meet its increasing energy demand.
Investment Board of Nepal has recently signed agreements of 900-MW each Upper Karnali and Arun III hydropower projects.
According to the agreements, Nepal will get 306-MW power free of cost. Nepal will also get free shares of the Upper Karnali and Arun-III. The Arun III is going to Rs 1 billion worth shares to locals, while the country will get 27 per cent share of the Upper Karnali.
Likewise, the government is planning to invest Rs 100 billion soft loan from India in Budhigandaki Hydropower.
These projects will not only help Nepal reduce ballooning trade deficit with India, but also help meet rising energy demand in India.
Currently, India has been providing electricity to Bangladesh. India has also promised Pakistan and Afghanistan to provide 1,000 MW each soon. However, India is a net buyer of power from Bhutan, currently, as India has already signed bilateral energy trading agreements with Bangladesh and Bhutan.
September's Nepal-India Power Trade Agreement (PTA) has opened door to sell the electricity produced in Nepal to Bangladesh. But the SAARC framework agreement has expanded the opportunity to regional level.
Similarly, World bank is helping construction of Dhalkebar-Muzaffarpur Transmission Line that will help cross border connectivity. Some 1,400 MW of power can be exported and imported through the transmission line.

Investment Board of Nepal, GMR sign PDA for Upper Karnali

Investment Board of Nepal and Indian company Grandhi Mallikarjuna Rao (GMR) Energy today signed Project Development Agreement (PDA) for construction of the $1.5 billion Upper Karnali Hydropower Project in western Nepal.

Investment Board of Nepal chief executive officer Radhesh Pant, president of Hydro Energy Business Unit of GMR RV Seshan and Nepal chief Harvinder Manocha signed the agreement after six years of signing of memorandum of understanding between Nepal government and India’s GMR-ITD Consortium.

The Project Development Agreement is expected to open a door for the Indian company to move ahead for financial close and construction of the 900 megawatt Upper Karnali Hydropower Project.

According to the PDA, Nepal will get 27 per cent free equity and 12 per cent (108 MW) free electricity from the project. Likewise, the agreement also ensured handover of the project, along with the 100-km transmission line, to the government after 25 years of operation.

GMR is planning to sell the remaining 88 per cent energy to India, Bangladesh and Nepal. However, the price will depend on the final project cost and the situation of demand and supply in the market on completion of the 900 MW hydel project.

Likewise, GMR will also construct a 2-MW project that will supply electricity round the year to locals. More than 2,000 people are expected to get employment opportunity from the project estimated to cost Rs 145 billion.

The project will bring road connectivity, hospital, technical school and bridge in the district.

Prime Minister Sushil Koirala, some of his cabinet colleagues, senior government officials, visiting Indian home minister Rajnath Singh and ambassador to Nepal Ranjit Rae were present at the signing ceremony at Singha Durbar in Kathmandu, on the occasion.

The agreement will be implemented with immediate effect, said deputy prime minister and home minister Bam Dev Gautam, after signing of the agreement.

"The agreement has opened the door for developing other large hydropower projects in Nepal," he added.

Likewise, wishing timely completion of the project visiting Indian home minister Singh termed the agreement a 'historic' one. "I believe this is the single biggest foreign investment in the history of Nepal," he said, adding that the success of GMR in Nepal will ensure credibility of both the company and India both.

The Investment Board of Nepal had been working hard on PDA negotiation with GMR since last June. But according to Pant, serious negotiations actually began last September. "Today's PDA agreement is the outcome of several rounds of discussions with stakeholders and has addressed issues raised by them," he said, adding that the board has prepared the PDA document according to the international norms and standards and good practices. Pant also said Nepal can buy energy at competitive market rates from the export-oriented project.

"GMR Group will mobilise 25 per cent equity capital while the remaining 75 per cent will be raised from international lenders including International Finance Corporation (IFC)," Seshan said, after signing the agreement.

There will not be any problem in raising prerequisite equity and debt capital to execute the project,” he said, adding that the GMR was confident of completing the financial closure within two years, according to the PDA. "We will implement the project within the next five years."

However, construction of re-regulating dam by GMR is yet to be finalised.

"The decision will be taken based on the consultation with Nepal government once the joint study team submits its report,” Seshan added.

According to the PDA, the Indian developer will have to build the re-regulating dam on its own, if the study report shows Upper Karnali will impact water flow for downstream irrigation project. Construction of the re-regulating dam was suggested by an independent study team has been included in the PDA document after experts and Irrigation Ministry drew attention to the matter, saying the hydropower project would affect irrigation projects.

Likewise, planning commission vice chair Dr Govind Raj Pokharel, who led the technical team to study the PDA, hoped that the PDA signing would be a first step towards the prosperity of Nepal. "It will also send message of an improved investment climate in the country," he added.

The Cabinet has approved the PDA yesterday after the Investment Board of Nepal approved the amended PDA draft a day ago on Thursday.

The government yesterday also formed a high-level task force led by Dr Pokharel for the implementation of the project that is planned to be generate power by 2021. The panel will help address problems arising during project development.

The 900-MW Upper Karnali Hydro Power project – located on Karnali river in the Surkhet, Dailekh and Achham districts – was awarded to the GMR Group through an International competitive bidding process in 2008 on BOOT model.

Nepal signs BIPPA with India

Nepal today signed Bilateral Investment Protection and Promotion Agreement (BIPPA) with India to boost Indian investors’ confidence on Nepal.
The agreement will also help reduce doing business cost of the two countries as the investment of one will get equal treatment in the other country.
Minister for Industry Anil Kumar Jha and Indian Finance Minister Pranab Mukherjee signed the agreement on behalf of their respective countries in the presence of the Prime Minister of both the countries.
However, the agreement will be implemented only after exchange of diplomatic notes confirming that the legal requirements have been fulfilled for the entry into force of the agreement.
According to the agreement, "if an investor of a country suffers losses owing to war or other armed conflict, a state of national emergency or insurrection or riots in the territory of the other country will be given equal treatment, as regards restitution, indemnification, compensation or other settlement, no less favourable than that it accords to its own investors. Resulting payments shall be freely transferable."
India is not only the largest trading partner of Nepal but also the biggest investor in Nepal. Indian firms are the biggest investors in Nepal accounting for about 47.5 per cent of total approved foreign direct investments (FDIs).
There are about 150 operating Indian ventures in Nepal engaged in manufacturing, services — banking, insurance, dry port, education and telecom — power sector and tourism industries.
India is the seventh country to enter into BIPPA with Nepal as the country has already signed BIPPA with France, Germany, Britain, Mauritius, Qatar and Finland, though they do not have significant investments in Nepal.Due to insufficient internal homework Nepal however could not sign Double Taxation Avoidance Agreement (DTAA) and Power Trading Agreement (PTA).
DTAA will make the Indian investors feel more confident to invest in Nepal as they do not have to pay tax in both the countries. Currently, an Indian investor has to pay tax in its profit in Nepal and after taking it to India, it has to paty tax to the Indian government too. The Double Taxation Avoidance Agreement will exempt the tax payment on profits of Nepal in India.
Similarly, PTA will help Nepal, at present, and India, in the long run, to import and export more power cross border. According to current rule, Nepal can import only 50 MW of power from India. But the new agreement will pave way for more power trading.
The agreement will simplify Indian investors in Nepal like GMR (Upper Karnali) and Sutlaj (Arun III) to sell power to India after they complete their hydel projects in Nepal.