Hydel seeks conditional generation license

Kaligandaki ghasaKATHMANDU, April 3: Ambeshwar Engineering Hydropower Private Limited (AEHPL) has sought conditional license to begin construction works for 180 megawatts Kaligandaki Koban hydropower project, though the company has yet to get an environment impact assessment approval from the government.

“The company has written a letter to the Ministry of Energy (MoE) seeking conditional generation license for the project,” an official at the ministry said preferring anonymity.

The AEHPL, a joint venture of ESSAR Power Limited, an Indian company registered in Nepal, has requested government to issue conditional generation license so that it could begin construction in near future. “However, the company has not said when it will start the construction of the project,” the official said.

The government has not made any decision so far on issuing license to the project. “It is yet to be discussed among the concerned divisions and departments,” the official said. Normally, the government does not issue generation license to projects that have not received EIA approval.

However, the government has provided generation license to 400 MW Lower Arun Hydropower Project. The project based in Mustang, a mountainous district in the north, has not yet signed a power purchase agreement (PPA) with the Nepal Electricity Authority (NEA), the sole state-owned hydropower sector regulatory entity. The project that is estimated to cost around Rs 40 billion has been successful to attract attention of private as well as development agencies eager to invest.

The company has completed the detailed project report (DPR). “The company has asked for a conditional generation license but has not demonstrated its financial closure so far,” the official informed.

Meanwhile, independent power producers have urged the government to waive off value added tax on civil construction of hydropower projects. They also have half a dozen other demands.

A delegation of the Independent Power Producers´ Association Nepal (IPPAN) had met Shankar Prasad Koirala, the minister for finance and industry, on Wednesday and made an appeal for host of changes to the existing policies.

According to the memorandum the IPPAN officials submitted to Koirala, power producers have asked government to rethink about the Nepal Rastra Bank´s refinancing policy, implement the PPA rate that the government has endorsed for hydropower projects that will be completed by April 2015 and develop an efficient mechanism for coordination among the concerned agencies for project development.

“The refinancing policy of the NRB should be changed,” reads the memorandum. “It should be for the entire period of project development or it should be automatically renewed each year during the project development period.” As of now, the NRB refinances only for six months.

Source : Republica