Hydro Ventures, promoted by the private sector, will start construction of 86 MW Solu-Dudhkoshi Hydropower Project from August after completing all pre-construction works including financial arrangements and contract.
The company, that received generation license from the Energy Ministry last September, aims to complete the project by the end of 2018. The Nepal Electricity Authority (NEA) board has also approved power purchase agreement (PPA), and the NEA and the company will sign PPA within a few days. The company is a subsidiary company of Sahas Urja Limited.
Feasibility study has put the estimated project cost at Rs 9.68 billion. Detailed engineering is being done now. Chairman of the company Him Prasad Pathak says discussions are being currently held with commercial banks to arrange finance for the project and loan agreement will be signed soon. He claims that many banks are ready to invest in the project. “Making arrangements for billions for the project is a big challenge,” he, however, concedes.
He reveals there will be 30 percent of equity investment (around Rs 3 billion) and 70 percent of loan (around Rs 10 billion) as per the investment structure prepared. He says a minimum of Rs 100,000 for individual and Rs 500,000 for institutional investment is being collected for equity investment in the project. He says cooperatives will also invest and claims that there will be 20,000 institutional investors in the project.
He says cost of the financially lucrative project will be low at just around Rs 110 million per MW. The project will generate 521 million units of electricity a year, as per the feasibility study. Dam of the project will be constructed two kilometers upstream from the confluence of Solu Khola and the water will be dropped into Dudhkoshi through a five-kilometer tunnel. Land acquisition has been completed for the project that will be constructed in Tinla and Kagel VDCs of Solukhumbu.
Essel Power of India and Nepali investors have already started construction of Lower Solu in Solu Khola, ITC Group of Nepal 23.5 MW Solu and Dovan Hydropower 5.2 MW Junibesi Hydropower Project. A total of seven projects with combined installed capacity of 225 MW are to be constructed in Solu Khola alone. 2.9 MW Sisa Khola and 5 MW Sisa Khola A have also been identified in the same corridor.
The Energy Ministry has already revoked license of 18.5 MW Upper Solu under recommendation of the Commission for Investigation of Abuse of Authority (CIAA) that said Beni Hydropower did not work as per contract agreement. The cabinet has submitted a proposal to the cabinet to revive its license as per clause 35 of the Electricity Act.
Source : Karobar Daily