By IANS
Kathmandu : Nepal's biggest energy scheme, a 750 MW hydropower project that has a 25-year power purchase pact with India's Power Trading Corp (PTC), is finally ready to take off after being held up for a decade due to the Maoist insurgency and political instability.
William Bultitude, managing director of West Seti Hydro Ltd (WSH), the company that has been given a 30-year licence for the giant project in Nepal's remote Doti district, said the project has got a boost from the current eight-party government after a "traumatic time" since 1997, when the agreement was signed with Nepal.
Construction is expected to start around November and completion expected by 2013.
The 750 MW project on the river West Seti would be a boon to the power-starved bordering states of India.
In 2003, WSH signed a power purchase agreement with PTC to sell the total generated power to the Indian company, which would amount to 3,600 GWh (Gigawatt hour) per year at the rate of 4.95 cents per kilo watt.
The $1,200 million project includes power delivery to the Indian high-voltage grid with a transmission line to Bareilly in India.
There are six shareholders in the project, including India's Infrastructure Leasing and Financial Services Ltd that holds 15 percent of the equity, and the government of Nepal with a 15 percent share.
The other four partners are West Seti Holdings, registered in Hong Kong, with 26 percent, the Asian Development Bank (15 percent), China's China National Machinery Import Export Corp (15 percent) and Special Purpose Vehicle, a consortium of Nepali financial institutions holding the remaining 14 percent.
Three Chinese banks have taken the lead to provide about 75 percent of the banking: China EXIM Bank, Industrial and Commercial Bank, and Bank of China.
Though the ADB says the project will change the face of the far western district, that is one of the most neglected and inaccessible, and earn Nepal 10 percent of the annual revenue, it ran into trouble over the pact with PTC.
Sharing water resources with India is one of the most sensitive issues in Nepal and at a time the country is facing an acute power shortage, questions were raised about selling the entire power to India.
Bultitude however says that supplying Nepal's load centres is not viable as the load centres are too far away and there are no transmission links.
Earlier, Nepal had been insisting on 10 percent free energy but settled for a share of the revenue after the ADB stepped in to mediate.
Displacement also remains a thorny issue. With over 1,500 families to be displaced, resettlement plans have to be approved.
WSH officials Thursday went to the project site to hold a dialogue with the MPs from the region, NGOs, student leaders and other stakeholders and are optimistic that the venture will now take off.
WSH is 100 percent owned by Australian company Snowy Mountain Engineering Corporation that has been involved in hydropower projects, especially studies, since the 60s.