West Seti Project: Investment Board, China firm to ink revised MoU
KATHMANDU, AUG 27 -
The Investment Board (IB) and the CWE Investment Company of China are signing a revised memorandum of understanding (MoU) on Monday, giving 10 percent stake of the 750 MW West Seti Hydro Project to locals of Far West Nepal.
The new MoU has incorporated suggestions put forth by the Natural Resources and Means Committee (NRMC) of the dissolved parliament on the MoU between the Energy Ministry and the then China Three Gorges International (now CWE Investment Company).
The NRMC had in March suggested making the project a multipurpose one by giving 10 percent stake to the people of the Far West and extracting maximum benefits for the country.
The Chinese company had agreed to revise the MoU when top government officials visited Beijing on the second week of August.
The Nepali team had held talks with Chen Fei, the president of CTGC and its board members.
The much-talked-about hydro project had been given a second lease of life when the government and the Chinese company signed an MoU on February 29 this year for the construction of the 750 MW project.
The project was earlier stalled for 17 long years as its licence holder, the West Seti Hydropower Company Limited (WSHPL), failed to garner financial resources for its construction.
As per the MoU signed in February, the Chinese company would have 75 percent stake in the Rs 160 billion project, while the Nepal Electricity Authority would own the rest. “That equity structure will now be changed,” sources at the Energy Ministry said. “The 10 percent share to the locals could be given out of the 75 percent of the CWE,” the sources said.
The new MoU will also explore possibilities of developing an industrial hub in the Far West with technical and financial assistance from CWE’s holding company China Three Gorges Corporation (CTGC). The project will supply 150 MW of electricity to this industrial hub.
The state-owned CTGC is China’s largest hydropower developer, better known as the company that constructed the Three Gorges Dam, the world’slargest power station in terms of installed capacity (20,300 MW). As per the NRMC suggestion, the new MoU
has a clause which talks of making the project a multipurpose one without the Chinese company’s returns being affected. According to Energy Ministry sources, the project’s power purchase agreement (PPA) will be finalised after a detailed project study. “The MoU will state that if the PPA is done in dollar, the risk of fluctuation of foreign currency should be shared,” the sources said.
Both sides—Nepal government and CWE—have also agreed to complete the West Seti project and the construction of transmission lines simultaneously. China Exim Bank and China Development Bank have shown interest in providing concessional loans for the construction of the transmission line. The representatives of these two banks are arriving in Nepal within two weeks for negotiations.
Source: The Kathmandu Post
