IBN to start PDA negotiations in Feb

KATHMANDU:

Investment Board Nepal (IBN), a government agency which oversees implementation of projects with investments of over Rs 10 billion and hydro projects of over 500 megawatts, will resume negotiations with developers of 650-megawatt Tamakoshi-III and 600MW Upper Marsyangdi-II hydroelectric projects in February.

“During the negotiations on the project development agreements (PDAs), we will raise issues of equity distribution to the public, free energy to be extended to the government and other benefits to the country and locals,” Ghanashyam Ojha, head of external affairs at the IBN, said.

Tamakoshi-III is being built by Statkraft International, a Norwegian company, while Upper Marsyangdi-II is being developed by GMR Energy of India.

The IBN, a month ago, had held talks with developers of Tamakoshi-III, being built on Tamakoshi River in Dolakha and Ramechhap districts at a cost of around Rs 111.30 billion. The talks ended with both sides agreeing to meet soon to finalise the PDA.

The IBN board had previously instructed its management and project developer to seal the PDA within April-end. At that time, the IBN had extended the tenure of Tamakoshi-III Project Negotiation Agreement (PNA) by six months.

The IBN had signed the PNA with the project developer in April 2013 to provide security of tenure over the project because of the expiry of survey licence.

The government, in March 2007, issued the project’s survey licence to SN Power, a Norwegian company owned by Statkraft, Norway’s largest utility company, and Norfund, a state-owned Norwegian investment fund for private companies in developing countries.

Since the tenure of survey licence cannot be extended by more than five years, Nepal and SN Power had signed the PNA with a validity of 18 months. During this period, the IBN and the project developer were supposed to conclude the PDA. However, despite holding 13 rounds of negotiations, both the parties could not strike a deal.

On the other hand, the IBN has held very few talks on development of Upper Marsyangdi-II project.

However, IBN officials hope that the talks would move ahead smoothly, as representatives of both sides know each other and have worked closely for months prior to the signing of 900MW Upper Karnali PDA in September.

Upper Marsyangdi-II project is being built on Marsyangdi River in Manang and Lamjung districts. It has completed all survey and investigation works, finalised the feasibility studies, and has already received majority of the clearances from the government.

The International Finance Corporation, a member of the World Bank Group, has already made equity investment in the hydropower project.

Source: THT