FinMin seeks India assistance to build two hydropower projects

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    BishnuFinance Minister Bishnu Prasad Paudel has sought additional financial assistance for development of two hydropower projects from India.

    Paudel sought grant assistance to develop a reservoir project of 250 MW and line of credit to build a project of 500 MW capacity.

    Finance Secretary Lok Darshan Regmi said Paudel sought the assistance during the latter’s meeting with Minister for External Affairs of India Sushma Swaraj in New Delhi. 

    Regmi, who was also present in the bilateral meeting, said the assistance is likely to be announced during Prime Minister K P Sharma Oli’s upcoming visit of India.

    The two projects are likely to cost around Rs 150 billion or US$ 1.5 billion. Average hydropower development cost is Rs 200 million per MW.

    India has already announced two major lines of credit worth $2 billion. One was announced by Indian Prime Minister Narendra Modi during his Nepal visit in August 2014, while the other was announced by Swaraj during International Conference on Nepal’s Reconstruction held in Kathmandu in June last year.

    Paudel returned to Kathmandu on Wednesday, wrapping up his three-day India visit. His visit was meant to lay ground for Prime Minister Oil’s visit which is likely happen on February 19-24.

    Officials of Ministry of Finance, Ministry of Foreign Affairs and Ministry of Energy have started groundwork for signing agreement for assistance for two hydropower projects. They are likely to propose specific projects during the visit.

    Likewise, agreements on mobilizing funds announced for reconstruction by India will also be inked during Oli’s visit, according to a press statement issued by Ministry of Finance.

    India has expressed commitments to take bilateral relations to a new height and leave no stone unturned to make Oli’s visit a success, the statement added.

    Swaraj, who came to Nepal to pay final tribute to late PM Sushil Koirala on Tuesday, has said that India was eager to welcome Oli.

    The recent developers suggest that relation between the two countries is improving after unofficial Indian blockade for nearly 20 weeks affected daily life of people and rattled the country’s economy. The energy crisis that resulted from the blockade was the worst that the country has faced in its history.

    The implementation of Indian grants and assistance, however, is not satisfactory. Nepal received a line of credit $31 million from Exim Bank of India in 2010 for Rahughat Hydropower Project (40 MW). But the contract has been terminated and the project official are preparing for fresh bidding.

    Similarly, Hulaki Rajmarga (Postal Highway), which is being implemented under Indian assistance, is also in soup with contracts of five out of six packages terminated. The project is in the process of selecting new contracts for the five packages. The finance ministry statement said that the road will now be redesigned into a double-lane road with the aim to complete in five years. The statement also said that three undergoing cross-border transmission lines will be completed soon.

    Nepal has also sought Indian assistance to develop Bir Hospital into a modern and well-equipped hospital, establish eight polytechnic institutes and an Ayurveda university, among others.

    Fourteen small and large roads as well as two irrigation projects worth $530 million are being built utilizing the $1 billion line of credit announced during Modi’s visit. The government is yet to select projects to utilize the remaining amount.

    Source : Republica