IBN forwards PDA template to ministry

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    KATHMANDU, MAR 02 –

    Power development agreementsThe Investment Board (IBN) on Friday forwarded its power development agreement ( PDA ) template to the Ministry of Energy.

    In the first week of January, Chief Secretary Lila Mani Poudel had instructed the ministry to use the PDA template prepared by the IBN while negotiating with power developers for projects below 500MW so as to prevent any confusion and to maintain uniformity in the provisions and facilities to be offered to the developers.

    Previously, the IBN and the ministry had developed two separate templates — one for projects below 500MW and another for projects above the capacity.

    The template forwarded by the IBN has already been endorsed by the Prime Minister who also chairs the board.

    IBN Chief Executive Officer Radesh Pant said the board forwarded the PDA template on Friday as per the ministry’s request. “Although we were planning to forward the template after making final revision from experts, we forwarded it to the ministry after it made repeated calls,” he said.

    The government on February 14 had endorsed a revised PDA template. Now, the ministry and the IBN will use the same PDA template while negotiating with power developers. The ministry will negotiate with foreign hydropower developers for projects below 500MW capacity, while the IBN will negotiate with developers of projects above that capacity.

    According a ministry official, although the PDA template will be the same, some provisions may be changed based on a particular project’s capacity, volume of investment and the number of beneficiaries.

    The ministry had also formed a committee led by Joint Secretary Sunil Bahadur Malla to synchronise the PDA templates and begin negotiation with developers meeting the set criteria. “The committee will complete synchronising the templates within a week and then the developers will be formally invited for negotiation,” said a senior ministry.

    The criteria include technical and financial analysis, detailed engineering study, environmental impact assessment, documents related to PPA, and the connection agreement signed with NEA.

    According to ministry officials, the PDA agreement will be signed with projects submitting the complete documents in the first phase. “In case of other developers who have applied for the PDA but do not meet the criteria, the ministry will sign the agreement with them in the second phase after they fulfil the criteria,” said a ministry official.

    Over half dozen projects, including Lower Arun (400 MW), Balefi (450 MW), Likhu (120 MW), Upper Trishuli -1 (216 MW) and Upper Marshyangdi ‘A’ (50 MW), have applied for the PDA . Some of them are waiting for the agreement for the last three years.

    In the agreement, the government assures the investors that it would avert any possible social, economic or policy-level uncertainties during the construction phase. Generally, issues related to taxes, licence period, free energy, royalty, repatriation rights and parties’ obligations are included in the PDA .