Friday, April 8, 2011

ADB to invest in Upper Seti hydro project

ADB to invest in Upper Seti hydro project

The Kathmandu Post daily 2011-04-08


The Asian Development Bank (ADB) has said that it is willing to invest in
the 127 MW Upper Seti Hydroelectric Project located in Damauli in Tanahun

The government of Nepal and the ADB reached an understanding to this effect
during ADB Vice President Xiaoyu Zhao’s recent visit to Nepal when he met
with Prime Minister Jhala Nath Khanal and Finance Minister Bharat Mohan

“Vice President Zhao told the prime minister and the finance minister about
ADB’s willingness to invest in the project,” said ADB Country Director
Barry Hitchcock. “This project is attractive for us as it already has a road and
other infrastructure,” added Hitchcock. As per the ADB’s estimate, the total cost
of the project would be around US$ 300 million (Rs 21 billion).

On Dec. 23, 2010, the ADB and the government signed an agreement under
which the bank would provide a technical grant of Rs 180 million to do a detailed
study for the project. “The ADB could also issue a loan for the project,” said
Hitchcock. According to the government, the ADB’s technical assistance will
be used to conduct a detailed engineering study including development of
design options, specifications and drawings for the civil works, development of
design options, specifications and drawings for the electromechanical and hydro-
mechanical works and transmission facilities and the bidding process.

In 2006-07, the Nepal Electricity Authority completed an upgrading
feasibility study for the project with technical assistance from the Japanese
government through JICA. After the detailed engineering study is finished in 2012, the
project is expected to go into the construction phase. It is projected to
be completed by 2016-2017 if everything goes as planned.

The Upper Seti is one of the few storage-type hydropower projects that has
been identified as a national priority project by the government and recommended
for further implementation by the last two national budgets.

When asked if the ADB would be willing to invest in the 750 MW West Seti
Hydroelectric Project too, Hitchcock said the bank was positive about
investing in it. “We’ve not talked about it,” added Hitchcock. “But if the government
shows interest, we can discuss it.”

The government stated that the West Seti project located in Doti district
would be constructed to address domestic energy demand when unveiling the energy
crisis control programme. The programme has also envisioned constructing
one 100 MW project each in the five development regions on a turn-key basis.

West Seti Hydro Power Company Limited (WSHPL), promoter of the West Seti
Hydropower Project, had proposed building it under the public-private-
partnership (PPP) model after failing to put together the required

WSHPL has filed an application at the Department of Electricity Development
to extend the deadline for financial closure of the project. The ADB had
earlier shown interest in the project.

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