Brazil’s Braspower forwards eleventh hour upgrade proposal

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    KATHMANDU, May 10:

    Lower Arun HEPThough the government has already rejected the proposal to upgrade the capacity of Lower Arun Hydropower Project to 650 megawatts, the project developer has filed an application seeking upgrade of the project capacity at the eleventh hour. 

    The project located in Sankhuwasabha was awarded power generation license in 2012. The project was supposed to start construction by attainting financial closure by May 15, 2014. 

    The Department of Electricity Development (DoED) has already told Braspower, a Brazilian company that is developing the project, that capacity upgrade proposal at the eleventh hour would only delay the project.

    Talking to Republica, Information Officer at DoED Gokarna Raj Pantha said that the government some six months ago had rejected the capacity upgrade proposal on technical grounds. But the developer has again applied to the DoED saying the project would be feasible only if its capacity is upgraded. 

    Pantha informed that the developer has neither produced a sound technical proposal nor has it submitted environment impact assessment (EIA) report, signed Power Purchase Agreement (PPA) and attained financial closure .

    “The license awarded to Braspower is expiring on May 15. Project upgrade proposal forwarded by Braspower at the eleventh hour has thrown the project into uncertainty,” added Pantha. 

    “It would have been justifiable had the developer forwarded the capacity upgrade proposal within the survey period. The developer should have completed the preliminary works to start project construction by now,” added Pantha. 

    Talking to Republica, Rajesh Sinha, executive director of BrasPower, has argued that the project would be feasible only if its capacity is upgraded. He also argued that they have to synchronize their project with Arun III of 900 MW, which is located upstream and regulates water flow, to make it feasible.

    He also claimed that the government has ignored their proposal even as they have explained it to the government that the project would be feasible only after capacity upgrade.
    However, Panthi said they have already clarified to the developer in written form that it was not possible to approve the capacity upgrade proposal.

    DoED informed that a technical committee led by Deputy Director General of DoED Sanjaya Sharma had studied and concluded that the proposal was not technically sound. Energy Secretary Bishwa Prakash Pandit had then decided to reject the upgrade proposal.

    The project has also proposed selling 30 percent of the electricity generated by the project during the dry season to NEA. Sinha said they have already signed a Memorandum of Understanding (MoU) with Power Trade Corporation of India for PPA.

    However, it would be more relevant for the Nepal government to first sign a power trade agreement with India before we sign PPA with PTC India, added Sinha. He also added that Bangladesh is reluctant to purchase electricity generated by the project.

    International Finance Corporation, member of World Bank Group and Brazilian bank have also expressed interest to invest in the project. Sinha said they are yet to fix the share volume to be given to promoters. Regarding EIA, Sinha claimed that they were in the final stages of acquiring the forest ministry´s clearance.

    Other sources claim that the developer is only trying to buy time as there are no transmission lines in place to evacuate power generated by the project.

    Some other sources also claimed that behind-the-scenes activities are at play not to upgrade the project capacity as it would bring the project under the jurisdiction of the Investment Board Nepal. Project of 500 megawatts capacity and above comes under the purview of IBN. But Pantha denied the allegations.

    The project has already acquired survey license for construction of the transmission line from Sankhuwasabha to the Indian border.

    Sinha said that they will construct the transmission line jointly with Sutlej Jal Vidyut Nigam, the developer of Arun III. The project was awarded through open competition in 2002.

    The survey license for the project was renewed again as the developer failed to take the project ahead and had cited the Maoist insurgency for its inability to make any progress.

    Source : Republica