KATHMANDU, APR 17 –
The government also has the stake in the project which CWE Investment Company, a subsidiary of China Three Gorges Corporation (CTGC), has agreed to develop. As per the revised memorandum of understanding signed between Investment Board Nepal (IBN) and the Chinese Company on August 27, 2012, the CWE will have 75 percent stake in the project with the government holding the rest. The Chinese company reportedly agreed to grant 10 percent stake to the locals of the Far-western region.
As the project requires huge investment, the government sought aid from the Chinese government, according to government officials. “We wrote to the Chinese government about one and a half weeks ago, seeking assistance for the project,” s aid Hari Pandey, under secretary at the International Economic Cooperation Coordination Division at the Finance Ministry. “We have asked the Chinese government to provide as much grant as possible.” The project cost has been estimated at Rs 160 billion.
According to Pandey, a proposal has also been attached with the letter that mentions the amount that the government
would require to invest in the hydropower project and the transmission line. As per the proposal, it requires $ 400 million for the purpose.
It requires laying of a 400km-long transmission line to connect the project’s power to the national grid. During the signing of the MoU, the IBN and CWE also agreed to take ahead the transmission line project simultaneously. China Exim Bank and China Development Bank had shown interest to invest in the transmission line project.
Pandey s aid that the letter was also to assure the Chinese side that the Nepal government was serious about the project. “This will encourage the Chinese company to conclude the power development agreement (PDA) with the IBN,” he added.
Two months ago, the Chinese company had assured the IBN of its investment in the project. The IBN is awaiting a response from the Chinese developer. The IBN is now planning to hold talks with CWE Investment this week, to move forward the project.
In its letter to the IBN in January-end, the CWE had expressed its commitment to the 750 MW reservoir project. In its letter, the CWE had stated that they were in the process to get approval from their board. It was in response to the IBN letter, committing to resolve the issues of rehabilitation and resettlement, land acquisition and construction of the transmission line.
Amid speculation over the West Seti Project, IBN CEO Radesh Pant claimed that the Chinese company is very much interested in the project. According to Pant, once the CWE board gives approval, a special purpose vehicle (SPV) will be established for the construction of the project.
The IBN had earlier taken written commitment from the Ministry of Land Reforms and Management, the Energy Ministry and the Finance Ministry that are directly related to the project.
Source : The Kathmandu Post