License of Kabeli set to be revived

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    KATHMANDU, Jan 25

    Kabeli-A-ProjectThe Energy Ministry is preparing to send the proposal to revive license of the proposed 37.6 MW Kabeli A Hydropower Project to the cabinet. The Commission for Investigation of Abuse of Authority (CIAA) in the third week of October had instructed the ministry to revoke license of a dozen projects including Kabeli stating that the projects had not fulfilled the conditions set at the time of signing agreements.

    The ministry is preparing to send the proposal to the cabinet stating that the project could not be moved forward due to the ministry itself. Butwal Power Company (BPC) Limited will develop the project through Kabeli Energy Limited. BPC aims to complete the project within four years. Energy Secretary Rajendra Kishore Chhetri has already prepared the proposal and submitted it to his minister Radha Kumari Gyawali. Chhetri says the project was delayed as the government did not sign loan agreement with the World Bank (WB) in time. “The project as delayed due to the government. The project could not be developed as the government is still uncertain after five years as to whether to take loan or grant from the WB,” he adds. Reminding that the company was awarded generation license as it expressed commitment to provide electricity at the cheapest rate, he says the project cannot be compared with other projects. The company has already made financial arrangements for investment and signed power purchase agreement (PPA) with the Nepal Electricity Authority (NEA). The WB and the International Finance Corporation (IFC) under it are investing Rs 7.50 billion in the project.

    BPC and Infraco Asia will jointly develop the project with BPC investing 54 percent and the latter 46. Feasibility study has showed that the project will generate 200.60 million units of electricity a year. A total of Rs 10 billion will be invested for the project at Rs 265 million per MW. Work of the project has not been started even though the project was set to be completed in 2011 due to the delay in making financial arrangements. This has increased cost of the project.

    Kaveli had received license to generate 30 MW through free competition but the company later upgraded the project to 37.6 MW. The ministry and the developer had signed project development agreement (PDA) in 2009. The government has issued generation license for 35 years. It has been more than eight years since the company received generation license but the date for civil construction of the project has yet to be fixed. Kabeli Energy has already completed the detailed project report (DPR) and environmental impact assessment (EIA). The road to the project site has also been already completed.

    Chief Executive Officer (CEO) of BPC Uttar Kumar Shrestha says the project will be completed by the end of 2019. The contractor for the project has already been issued letter of intent while the consultant was appointed six months ago. Electromechanical procurement has been stopped as the license has been revoked. Shrestha claims civil construction will be started from April if the company again gets license.

    Source : Karobar Daily