ADB, JICA willing to fund Tanahun Hydro project
KATHMANDU, FEB 08 -
The Asian Development Bank (ADB) and the Japanese International Cooperation Agency (JICA) have shown interest in funding the Tanahun Hydropower Project.
The two agencies in their joint proposal have proposed providing US$ 151 million each to build the reservoir-type project which is formally known as the Upper Seti Hydropower Project.
The project is expected to cost US$ 464 million as per the revised estimate, and the Nepal government and other international investors are expected fill the funding gap.
The Nepal Electricity Authority (NEA) which is now conducting design work of the project, has revised its capacity to 140 MW from 127 MW, and the cost too from the original estimate of US$ 300 million.
Project director Mahesh Acharya said that the ADB and JICA were positive about providing loans to Nepal’s second reservoir-type project after Kulekhani. “The ADB is committed to providing a loan for the project,” he said. “JICA is also positive.”
A Finance Ministry official said that the foreign aid component would be basically loans, but the ADB could also provide a certain portion as grant.
The government has also not committed any funds for the project so far. “If the government agrees to provide US$ 96 million as counterpart funding, international investors can provide the rest,” said Acharya.
The Tanahun Hydropower Project is one of the few storage-type hydropower projects that have been identified as national priority projects by the government and recommended for further implementation by the last two national budgets.
As per the proposal, a separate company, Tanahun Hydropower Company, will be formed in which NEA will have a majority stake. “We are in the process of registering the company which will probably be completed within the next one month,” said Acharya.
According to him, international companies are also expected to be shareholders in the project as per the proposal. The designing work, which is currently being done, is also expected to be completed in three-four months. The ADB had provided technical assistance of $ 2.5 million to prepare a detailed design study.
“We will then appoint a consultant for the project,” said Acharya. Construction is expected to start from the end of 2013, and the entire project is expected to be finished by 2019 as per the current plan. “We are, however, working on how to shorten the project period,” said Acharya.
Despite being a reservoir-type project, it is expected to displace relatively fewer households, less than 100 as per the current estimate. “But the area to be inundated will be relatively bigger,” said Acharya.
Source: Kantipur
