“We are preparing to hand over the task of implementing the project to the DoED through the fiscal policy for the upcoming fiscal year 2013/14,” an official at the Ministry of Energy (MoE) told Republica on Friday.
This is the first time that the department, which has been assigned the task of issuing hydropower licenses, is getting the task of implementing a hydropower project after Nepal Electricity Authority (NEA) came into being.
“Few months ago, we had submitted a proposal to the ministry requesting it to give us project implementation task as well,” Madhu Prasad Bhetwal, senior divisional engineer at the DoED, said. “The project will be handed over to us once the government adopts the policy of investing on hydropower projects on its own through the fiscal policy for 2013/14.”
The government has decided to seek loan assistance from the Saudi Fund for Development (SFD) and Kuwait Fund for Arab Economic Development (KFAED) to implement the project that is estimated to cost around US$ 55 million.
The SFD has agreed in principle to provide loan assistance to the government for the project. “The government signed $18 million loan assistance agreement for the project with KFAED in March,” added Bhetwal.
The government is yet to allocated funds for the project based in Achham district in the far-western region.
“If everything goes as planned, the government will allocate necessary amount for the project in the upcoming budget,” said Bhetwal.
The project is among the many hydropower projects identified under the medium-scale hydropower project study conducted in 1998. The DoED aims to complete the project by 2019.
“We will conduct environment impact assessment (EIA) study once the project is formally handed over to us,” Bhetwal said.
However, sources at the energy ministry say Nepal Electricity Authority (NEA) is against the idea of allowing the DoED to implement the project. “NEA fears that if the DoED is allowed to implement projects, it will not let the former implement the comparatively better projects in terms of cost and rate of return,” an energy ministry source said, quoting NEA officials.