Review Initiated for 456 MW Upper Tamakoshi Hydropower Project's Power Purchase Agreement Amidst Concerns Over Terms and Shareholder Income

Upper Tamakoshi Hydropower Limited's 456-megawatt Hydropower Project's Power Purchase Agreement (PPA) is set for a thorough review following a directive from Energy Minister Shakti Bahadur Basnet. This decision stems from a recent interaction program held in Kathmandu, where the District Coordination Committee Dolakha submitted a crucial letter. The program, attended by Minister Basnet on the 4th of Baisakh, addressed the 'Opportunities, Problems, and Challenges from Hydropower Projects of Dolakha', resulting in seven key points of discussion.

Among the decisions made during the program, a notable focus was placed on initiatives to alleviate the burden of loan interest for investors in the Upper Tamakoshi project. Notably, entities such as the Employee Provident Fund, Nepal Telecom, Citizen Investment Fund, and Insurance Institute have significant investments in the Tamakosi endeavor. However, despite substantial indigenous investment, which has attracted over 800,000 investors, concerns persist regarding the project's Power Purchase Agreement.

In contrast to similar hydropower projects aligned with the Nepal Electricity Authority, where unit prices soar to 4.80 rupees during the wet season and 8.40 rupees in the dry season, the Upper Tamakosi project presents a stark departure with substantially lower rates. Here, rates dwindle to just Rs. 3 during the wet season and Rs. 4 during the dry season. This significant disparity in pricing structures has notably resulted in diminished shareholder income, a concern persisting even three years following the project's completion.

In parallel discussions, Minister Basnet pledged comprehensive measures, including the full implementation of Environmental Impact Assessments (EIA) and ensuring transparency in project expenditures. Moreover, commitments were made to standardize transmission lines within the same corridor and extend project shares to those affected by transmission line construction. Additionally, the announcement of forthcoming permissions for local and state government bodies to approve hydropower projects up to 5 and 25 megawatts respectively.