Energy Ministry, Investment Board to work together on PDA

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    Power development agreementsKATHMANDU, May 4 — The Ministry of Energy (MoE) and the Investment Board of Nepal (IBN) have ended their protracted ego tussle and are preparing to make a collaborative effort to sign power development agreements ( PDA ) with projects designed for the local market.

    The MoE was upset by the establishment of the IBN which relegated it to small hydro projects despite being the concerned ministry. This resulted in lack of cooperation between the two government .

    The Baburam Bhattarai-led government set up the IBN to help investors in mega projects, and gave it the responsibility for handling projects above 500 MW. The ministry got to deal with projects with a capacity of less than 500 MW.

    In a bid to win the confidence of the MoE, the IBN has included Keshav Dhoj Adhikary, joint secretary of the ministry, along with Anup Kumar Upadhya, director general of the Department of Electricity Development (DoED), in its negotiation committee, which was formed recently to begin negotiations with power developers including GMR Energy, Jal Vidyut Nigam and SN Power.

    Indian company GMR Energy is developing Upper Karnali (900 MW) and Upper Marsyangdi (600 MW), while Satlaj is developing Arun-3 (600 MW) and SN Power is building Tama Koshi-3 (880 MW).

    Meanwhile, the ministry has asked the IBN to provide a copy of the draft of its PDA saying that it was more comprehensive than its own. Officials of the two institutions said they would work together in facilitating projects if they are being developed for the domestic market.

    “Cooperation between the IBN and the MoE will not only help each other to work with more confidence but also help to encourage hydro power developers by addressing their concerns on time and with more efficiency,” said IBN chief executive officer Radhesh Pant. Energy secretary Hari Ram Koirala said that there was no option other than working hand in hand. “We have technical expertise in the hydropower sector while the IBN has a strong negotiation team,” he said. “This will make a perfect team for us to begin PDA negotiations with projects that will cater to the local market.”

    However, an MoE official said the MoE and the IBN would work separately with regard to export-oriented projects. The two have started cooperating in export-oriented projects.

    Previously, the MoE had been complaining that the IBN did not provide a copy of its PDA . The IBN had been irked by the ministry’s lack of response to its queries about a number of technical issues.

    “It will be effective to use a single PDA draft to negotiate with export-oriented projects of all sizes to prevent confusion,” said MoE joint secretary Adhikary. He added that as the IBN had sent a copy of the PDA , the MoE was now working to sign PDA s with a number of projects smaller than 500 MW.

    So far, six projects including Upper Trishuli-A (216 MW), Upper Marsyangdi-A (50 MW), Middle Bhote Koshi-1 (40 MW), Budhi Gandaki-2 (260 MW), Kali Gandaki Gorge (164 MW), Lower Arun (400 MW) and Balephi (50 MW) have applied for PDA s at the DoED.

    Pant said that though PDA s for projects like Upper Trishuli-A would be signed by revising the already prepared draft, a separate draft would be prepared soon in collaboration between the IBN and the MoE for domestic projects. The IBN and MoE are planning to come up with a new PDA draft before starting PDA negotiations with the West Seti Hydropower Project (750 MW) that CWE Investment, a subsidiary of China Three Gorges Corporation, has planned to develop.

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