West seti transmission line: IB in talks with CDB for concessional loan
KATHMANDU, AUG 29 -
The Investment Board (IB) has started work to arrange a concessional loan to build transmission lines for the West Seti Hydel Project. The IB is conducting negotiations with China Development Bank (CDB) for the funding.
Two CDB officials, Tang Ke, deputy chief of the global corporation division, and Luan Tian Shui, assistant commissioner for international cooperation, arrived in Kathmandu on Sunday to talk with IB officials. “During their stay here, the IB will hold discussions for a concessional loan to build the transmission line,” said IB CEO Radhesh Pant.
According to a revised MoU signed on Monday, the IB and CWE Investment will synchronize the completion of the transmission line project and the West Seti hydropower plant.
The visit of CDB officials follows discussions held in Beijing in the second week of August between top government officials and China Three Gorges Corporation (CTGC), where CDB and Chinese Exim Bank had shown interest in providing a concessional loan for the hydro project and the transmission line.
According to the IB, the visiting CDB officials will study the documents related to the West Seti Project and provide the formal approval for the loan. “No agreement will be signed now, but the officials will confirm their approval for the loan,” added Pant.
As per the Feb 29 deal with CTGC, the Nepal government is responsible for erecting transmission lines to evacuate power from Western Nepal.
An IB source also said that a high-level technical committee from CWE Investment would come to Kathmandu to study the feasibility of the transmission line and its model. “The IB will conduct a financial and technical study with CWE Investment, and we will formally apply for a concessional loan from CDB with the exact amount,” said an IB official.
An Energy Ministry source said that no study for the construction of transmission lines to evacuate energy from the West Seti Project has been done so far.
Energy Ministry spokesperson Anup Kumar Upadhya said that the low capacity of the power grid in the Western Region would not be able to handle evacuation of the project’s energy.
“As per a rough estimate, transmission lines of 500 km length and 400 kV capacity would need to be developed to bring the energy to the Eastern Region,” said Upadhya. “Similarly, $ 300 million would be required to build sub-stations.”.
Pant said that the IB would prepare the ground for a commercial loan from CDB for Nepal’s equity for the project’s development.
“As the government holds a 25 percent stake in the project, it cannot manage the funds alone,” he added. According to him, it will approach China Exim Bank for additional resources as per the need.
The Natural Resources and Means Committee of the dissolved parliament had also recommended to the IB to manage a concessional loan for the hydropower project and the transmission line from China Exim Bank.
Source: The Kathmandu Post
