Hydel Projects below 500 MW: PDA talks on hold as developers fail to pay fees

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    KATHMANDU, APR 23 –

    Power development agreementsThe long-awaited power development agreement (PDA) negotiations with hydropower projects with a capacity of less than 500 MW have been deferred once again after their developers failed to pay the required fee. The Ministry of Energy (MoE) said it was unable to start talks as the developers who applied for

    PDAs did not pay the processing charges and asked for a month’s time to make payment.

    A month ago, six hydel projects with a combined capacity of 1,130 MW had applied for PDAs at the Department of Electricity Development (DoED). The projects are Upper Trishuli A (216 MW), Upper Marsyangdi A (50 MW), Middle Bhote Koshi I (40 MW), Budhi Gandaki II (260 MW), Kali Gandaki Gorge (164 MW) and Lower Arun (400 MW).

    Just a week ago, the Balephi project (50 MW) had also applied for the agreement, said a DoED source. “However, only Upper Trishuli A among the seven applicants paid the PDA fee when submitting the required documents,” said department spokesperson Gokarna Pant. The government is ready to sign the PDA, but the developers have asked for additional time to pay the fee,he added.

    As per PDA Procedure 2013, power developers have to pay US$ 1,500 per MW as processing fee to sign a PDA. If the government refuses to sign an agreement, the money will be refunded. Following repeated demands by developers, the government has initiated the process of signing PDAs.

    After PDA Procedure 2013 was issued on Jan 23, the DoED had formally called power developers to sign PDAs within two months. The department has expressed its readiness to extend the deadline by one more month if requested to do so, but none of them has requested an extension of the time limit, according to DoED officials.

    As per the new procedure, power developers are required to submit, among other documents, a feasibility report along with the estimated cost, financial analysis and drawing design, environmental impact assessment report, copy of the power purchase agreement (PPA) signed with the Nepal Electricity Authority (NEA) and letter of intent submitted by the funding institution to the developer.

    MoE officials said that after the developers pay the fee, the ministry would sit down for negotiations with them. The ministry has formed a PDA negotiation committee under the coordination of joint secretary Keshav Dhoj Adhikary.

    As per the instruction of chief secretary Lila Mani Paudel, the ministry has planned to use a single PDA template to negotiate with projects with different capacities. “As instructed, we have procured the PDA template prepared by the Investment Board,” Adhikary said.

    Source : The Kathmandu Post