Government sign PDA with Chinese firm for 135 MW Manang Marshyangdi Hydro

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7-Jun,2022,Kathmandu: Ministry of Energy, Water Resources and Irrigation,Government of Nepal signed initial Project Development Agreement(PDA) with Manang Marshyangdi HPP  (135 MW) marking the key milestone for the Project which is invested and developed  by Sichuan Investment Group with Nepali partner Butwal Power Company. Signing ceremony was held on 6th June,2022. PDA need to be approved by Council of Ministers’s board meeting. This Project aims to start the construction work within 1 year.

The initial signing of the PDA agreement for this project marks the achievements of Sichuan Investment Group in Nepal market, and has a major demonstration and benchmarking effect on Sichuan Investment Group’s implementation of the “One Belt and One Road” strategy, and will effectively lead foreign investment in Nepal.

The project will be constructed by Manang Marshyangdi Hydropower Pvt. Ltd., BPC and three Chinese companies (SCIG International Limited, Zhecheng International Investment Company Limited and QIEC International Company Limited Hong Kong) will invest in SCIG have set up SCIG International Nepal Hydro Joint Development Company Private Limited to invest in hydropower.

Manang Marsyangdi Hydro-electric Project (MMHEP) is located on the Marsyangdi River in Manang district of Gandaki Province of Nepal. The Project area lies in Annapurna Conservation Area (ACAP).

Share transaction with Chinese partners has been completed and BPC owns 20% shares in Manang Marshyangdi Hydropower Company Ptd. Ltd, a SPV to Manang Marsyangdi HEP. Department of Electricity Development (DoED) has issued Generation License (282MW RoR type) for 35 years period from 17 Nov 2018 and Power Purchase Agreement (PPA) has been conclude with NEA at 135 MW. Contractor’s camp and access road improvement was ongoing but the heavy rainfall and floods damaged these infrastructures in this rainy season. The process for amendment of generation license at 135 MW is ongoing at DOED. The water from the tailrace of MMHEP will be utilized by Lower Manang Marsyangdi Hydro-electric Project (LMMHEP). After the PDA and amendment of generation license, the financial closure will be completed and project construction will start.

The catchment originates at the Himalayas in western Nepal and source is Tilicho Lake. The catchment area at the dam axis is 1,635 km2, of which the area of 901 km2 is above 5000 masl. Now, the SEIA in relation to change of boundary is under approval process.

The company is owned by 19.5 percent of BPC and the remaining 79.5 percent by Chinese. The project is estimated to cost Rs. 33.37 billion. The feasibility study has shown that the project will generate an average of 759.48 million units of electricity annually.

Sichuan Provincial Investment Group Co. Ltd, Chengdu Xingcheng Investment Group Co. Ltd and Sichuan Qing Yuan Engineering Consulting Co. Ltd have joined hands with Nepal’s Butwal Power Company to develop three hydropower projects under a cascade development model on the Marsyangdi river.

The SCIG International Nepal Hydro Joint Development Co. Pvt. Ltd, the joint venture of the Chinese and Nepali companies, is also preparing to develop Manang Marsyangdi Hydroelectric Project (135 MW) and Upper Marsyangdi-2 Hydropower Project (327 MW) on the same river.

BPC has also entered into an agreement with China to bring in more than Rs 200 billion in foreign investment from China to generate 1,000 MW of electricity in Nepal. The target is to generate additional 1,000 MW of electricity in the next five years through the holding company.