Base rate for buying electricty from export-oriented projects fixed

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    ” NEA to buy at up to Rs 10.60 per unit “

    KATHMANDU, Dec 31

    NEA_BuldingThe Nepal Electricity Authority (NEA) will procure electricity from export-oriented projects at up to Rs 10.60 per unit during the dry season.

    The promoters of the projects being constructed for export to India will be able to sell electricity to NEA during the dry season with this decision. The board meeting of NEA on Tuesday approved the policy of procuring electricity from the export-oriented projects. NEA will seek proposal from the export-oriented projects for procurement of electricity. This is the first time that NEA has fixed such a base rate. An NEA official stated that the rate for procurement of electricity has been determined to fulfill the demand of electricity during the dry season and to send a positive message to the investors. The official revealed that NEA will soon seek proposals. NEA currently earns Rs 8.05 per unit on an average from selling electricity. The decision does not speak about the nature of projects and merely state that electricity will be procured at Rs 10.60 from export-oriented projects.

    GMR Energy Limited, Sutlej Hydro Power Corporation and Bhilwara Energy of India, and Statkraft International of Norway will be able to sell electricity in Nepal during the dry season after this policy arrangement. GMR is constructing 900 MW Upper Karnali and 600 MW Upper Marsyangdi II, Sutlej 900 MW Arun III, and Statkraft 600 MW Tamakoshi III. Statkraft has already proposed to NEA to sell electricity in Nepal. Similarly, Bhilwara is preparing to construct Balephi and Likhu-4 projects. “We have also paved the way for export-oriented projects. The promoters of those projects can now sell electricity in Nepal,” an NEA official said and added that the policy arrangement has been made on the basis of the recommendations made by a task force formed by the Energy Ministry. He revealed that electricity can be procured from both the run of the river and reservoir based projects.

    The ministry had formed a task force under Joint Secretary Keshav Dhwaj Adhikari to prepare base rate of return and recommend it in mid-March, 2013. The task force has determined a rate of return of 18 percent for investors to expedite construction of reservoir based projects. While the rate of return was only determined for the run of the river projects earlier, the government has also guaranteed return for promoters of reservoir based projects as they also need to be constructed in recent times. The government has been providing a rate of return of up to 16 percent for run of the river projects.

    Dedicated feeder policy approved

    The NEA board on Tuesday has also approved the policy for round the clock supply of electricity for the factories and non-industrial firms through separate dedicated feeders. Dedicated feeders will be available only where possible. Over 150 enterprises including cement and rod factories, hospitals, hotels, media houses, laboratories and others have submitted letter of intent to NEA for dedicated feeders.

    The industrialists themselves have to bear the expenditure incurred on installation of such dedicated feeders as per the policy. The rate for electricity supplied through the dedicated feeders is also yet to be fixed. NEA has stated that it will be double of the existing rate. It can be implemented only following approval from the Electricity Tariff Fixation Commission (ETFC) after determining it through mutual discussions.

    NEA on October 20 had sought letter of intent from commercial and non-commercial enterprises wishing to get electricity supply through dedicated feeders. The tariff will be almost doubled by making three categories on the basis of time of the day (TOD). The factories are currently paying Rs 7.75 per unit for the peak hours (5-11 pm), Rs 3.30 from 11 pm to 5 am and Rs 6.25 during normal hours (5 am to 5 pm). NEA is planning to supply 12 MW in Sunsari-Morang corridor, 25 MW in Simara-Birgunj-Hetauda-Bharatpur corridor, 4 MW in Janakpur-Sagarmatha corridor, 5 MW in Butwal corridor and 7.5 MW in Kathmandu Valley.

    Source : Karobar