Govt to seek Chinese aid for West Seti power line
KATHMANDU, NOV 02 -
The Investment Board Nepal (IBN) on Friday decided that the Nepal government would request the Chinese government for assistance for the construction of the transmission line for the West Seti Hydropower Project.
The IBN’s decision came against the backdrop of China Three Gorges Corporation (CTGC), the developer of the 750-MW reservoir project, seeking the government’s commitment on transmission line construction along with rehabilitation and resettlement issues.
Visiting Chinese investors last month had sought a clear policy and the government’s commitment to facilitate the project development procedures. “The government will now request China for the assistance for the transmission line,” said IBN CEO Radesh Pant.
IBN board member Bhawani Rana said the meeting also decided to simplify the procedures regarding the equity structure of the project. China has agreed to provide a loan of $1.6 billion for the project development.
An agreement between the IBN and CWE Investment, a subsidiary of China Three Gorges Corporation (CTGC), has assured 10 percent equity to the local population of the Far West.
CWE completed the technical evaluation of the project on March 8 and financial evaluation on July 30. “Now, the work will proceed ahead,” said Pant.
Meanwhile, the IBN approved an investment proposal of Nigeria’s Dangote Group to establish a cement factory in Nepal by allowing it to register its company. “As per the IBN provision, foreign direct investment above Rs 10 billion needs to be approved by the IBN,” said Rana.
Dangote Group, one of Nigeria’s most diversified business conglomerates, had approached IBN with an investment proposal of $800 million to set up a cement plant in Nepal some 10 months ago.
An IBN board meeting on Feb 13 had accepted the company’s investment proposal. Dangote Group President and Chief Executive Aliko Dangote is ranked by the Forbes magazine as the world’s 43rd richest person. Headquartered in Lagos, Nigeria, the group’s Dangote Cement is the largest cement producer in Africa.
With a net worth of $16.1 billion, Dangote is also the richest person in Nigeria. Most of his net worth lies in publicly traded Dangote Cement, which operates in 14 African countries, according to the magazine.
The board also decided to allow the International Finance Corporation (IFC) to play a “transaction advisory role” in the Tribhuvan International Airport (TIA) improvement process.
The IFC will assist the IBN in technical areas and provide comprehensive due diligence in evaluating risk return. “The IFC will carry out a workshop with experts on TIA improvement and facilities,” said Rana. A study will also be carried out whether TIA is viable under the public private partnership model.
Currently, the upgradation of the country’s sole international airport is being carried out under an Asian Development Bank (ADB) assistance of $80 million, including $70 million in loans and $10 million in grants. The government has also invested $30 million in the project. The upgradation work started on Sep 15.
As the government policy does not allow the private sector’s involvement in airport projects, sources said either the government needs to develop a clear policy or it should be clear whether such a sensitive area be allowed for private sector.
The Friday’s meeting also decided to extend the term of the memorandum of understanding of India’s GMR Energy for 900-MW Upper Karnali hydropower project by 18 months.
Source: The Kathmandu Post
