Delay in signing of PDA, PPA a hurdle in attracting foreign investment

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    trishuli-1KATHMANDU, April 25: Lenders have said that the delay in signing of Project Development Agreement (PDA) and Power Purchase Agreement (PPA) is the only hurdle in attracting foreign investors and international lenders for Upper Trishuli-1 (UT-1) hydropower project in Rasuwa.

    They arrived at the conclusion at the end of a four-day due diligence program for (UT-1) project with prospective lenders held in Kathmandu from April 20 to 23. The program was coordinated by Nepal Water and Energy Development Company (NWEDC) to expedite the process of achieving financial closure for the project.

    NWEDC is working to develop the 216-MW capacity project.

    “The prospective lenders are ready to invest if the project shows significant progress in signing of project documents,” a statement issued by NWEDC said.

    According to the statement, ‘All Lenders’ Appraisal’ meeting was held in Kathmandu to relay overall idea of the project to the lenders. Representatives from world’s renowned international lenders, inclusive of commercial banks, attended the meeting, according to the statement. The participants included representatives from International Finance Corporation (IFC), Asian Development Bank (ADB), FMO, Proparco, OPEC Fund for International Development (OFID), Sumitomo Mitsui Banking Corporation (SMBC), BTMU, SocGen, International Bank for Reconstruction and Development (IBRD), Multilateral Investment Guarantee Agency (MIGA) and European Investment Bank (EIB).

    Discussion on general, technical, environmental and social aspect of the project and project documents were held during the meeting, according to the statement.

    The team of lenders, who visited project site to acquire brief information about the project, appreciated the work at the site.

    Members of the team also held a meeting with Ministry of Finance (MoF) officials to ensure commitment from government side for UT-1 project. “In the meeting Finance Minister Ram Sharan Mahat welcomed funding from international financial institutions and committed that there will be no hurdles to bring back their investment return, interest return and debt clearance. Such positive message from MoF has increased the confidence level of the lenders, said the statement,” the statement added.

    The UT-1 project is being promoted by Korea South East Power Company (KOSEP), Daelim and Kyeryong Companies of South Korea, IFC and a Nepali promoter. The project will generate 1,533 GWh of energy every year. It is expected to start commercial operation by December, 2020.

    Source : Republica