West seti hydro power: IB, Chinese firm put stamps on revised MoU

West seti hydro power: IB, Chinese firm put stamps on revised MoU
Ekantipur Report
August 28 2012

http://www.ekantipur.com/2012/08/28/headlines/West-seti-hydro-power-IB-Chinese-firm-put-stamps-on-revised-MoU/359392/

Six months after signing an initial agreement, the Investment Board (IB)
and CWE Investments, a subsidiary of China Three Gorges Corporation
(CTGC), on Monday signed a revised memorandum of understanding (MoU) for
the development of the 750-MW West Seti Hydro Power Project and the
Transmission Project.

With the signing of an agreement, decks have been cleared for the
development of the $2 billion (Rs 180 billion) projects. The Cabinet
meeting on Monday endorsed the MoU, according to PMO sources.

The agreement follows discussions held in Beijing in the second week of
August between top government officials and the CTGC, where the Chinese
company agreed to revise the MoU signed on February 29.

The agreement has ensured 10 percent equity to the local population in
the Far West, allocation of 150 MW of electricity from the project to
the region and multipurpose benefits from the project to the maximum
extent economically possible. Both the parties�the IB and the CWE�also
agreed to synchronize the completion of the transmission line project
with the completion of the West Seti hydro power plant.

IB CEO Radhesh Pant said the agreement was signed in line with the
suggestions put forth by the Natural Resources and Means Committee
(NRMC) of the dissolved parliament on the initial MoU between the Energy
Ministry and the then China Three Gorges International (now CWE
Investment Company).

"This MoU signing has put transparency and national interest on the
top,"said Pant.

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.

Both the parties have jointly agreed to update the work plan and put
into place contracting terms which will help avoid cost overruns and
ensure timely completion of the project. The project is expected to be
completed by 2020.

According to the IB, the CWE has offered to provide help to secure
financial closure on the transmission line project. Similarly, the IB
will assist the Chinese company in the implementation of the project,
which includes government approval, provision of all available past
studies for the project, land acquisition, resettlement and
environmental impact assessments.

The agreement has also explored new 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.

"CTGC will either develop the hub on its own or as a joint venture with
the Nepali private sector, be it financially or technically,"Pant said.
An IB source said that a technical team from the CWE will arrive in
Nepal to begin further technical study.

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. The project was earlier stalled for 17 long years as its
licence holder, the West Seti Hydropower Company Limited failed to
garner financial resources for its construction.
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