18 – Month time frame for PDA

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    Power development agreementsKATHMANDU, March 7: The government has endorsed a project negotiation agreement (PNA) that would set a standard time frame for the completion of project development agreement (PDA) negotiations for hydropower projects of above 500 megawatts.

    The government has developed a PNA template that envisages completing PDA negotiations with power developers within a time frame of one and half years from the signing of the PNA. “A meeting of the board of directors of the Investment Board of Nepal (IBN) has already endorsed the PNA template,” a knowledgeable source told Republica.

    According to the source, IBN, which drafted the template, has forwarded it to three major power developers engaged in the development of four mega hydropower projects with a total installation capacity of 3,050 megawatts.

    “The developers have so far not made any comment on the PNA template that IBN has shared with them for their constructive suggestions if any,” the source disclosed. The power developers that have received the template are Indian power developers GMR and Sutlej Jal Vidyut Nigam, and SN Power, a Norwegian firm.

    GMR is engaged in the development of the 900 MW Upper Karnali and 600 MW Marsyangdi, and Sutlej is developing the 900 MW Arun III.

    Similarly, SN Power is developing the 650 MW Tamakoshi III project.

    IBN was formed more than a year ago to give impetus to the development of mega projects and it is also working on the finalization of a PDA template.

    According to the PNA template, PDA negotiations with developers would be automatically terminated if they cannot be completed within one and half years from the date of signing of the PNA.

    The PNA template that is on the verge of enforcement will end the proclivity to drag out the PDA negotiations for mega hydropower projects. According to the source, IBN developed the PNA template with technical assistance from the Centre for Inclusive Growth (CIG), a domestic organization that works in policy dialogues.

    Confirming the development, a high ranking official at IBN said that the PNA was mainly to bring developers within the time frame for sealing a PDA. “The PNA template is also meant to pass the ownership of the project to the developers,” said the official.

    IBN is in the process of forming a PDA negotiations team, having received a mandate from the IBN board of directors chaired by Prime Minister Dr Babu Ram Bhattarai.

    Source : Republica