Likhu IV to be reduced to 50 MW

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    KATHMANDU, May 7

    LikhuPromoter of Likhu IV Hydropower Project, Green Ventures, has decided to reduce capacity of the project and sell electricity inside the country stating that the government has not determined the wheeling charge for construction of trans-national transmission line and its use.

    It has applied with the Energy Ministry to reduce the capacity to 50 MW from 120 MW and has also corresponded with the Nepal Electricity Authority (NEA) to extend the time for power purchase agreement (PPA). Though the government had issued license for generation of 51 MW, it had designed the project by increasing its capacity to sell electricity during the rainy season to India. Project sources claimed that capacity is being reduced by changing design as transmission line and wheeling charge has not been determined at a time when construction had to be started. “Wheeling charge was not determined despite repeated application at the ministry. We are reducing capacity after being forced to do so. We will not construct a 120 MW project,” a project official said.

    The project, that was scheduled to start two years ago, has yet to be started. Bhilwara Energy of India and Triveni Group of Nepal are jointly developing the project through Green Ventures. Bhilwara has 80 percent stake in the project and Triveni the remaining 20. Green Ventures is again preparing the detailed project report (DPR) for the project. The project was previously deigned in Q28 model and its capacity will be reduced to 50 MW after designing in Q40. The company had already made financial arrangements last year for construction of the project. It plans to bring loan from IDI Bank, India on co-financing. The project cost was Rs 16 billion when designed for 120 MW while the new cost will be estimated after preparing DPR.

    The capacity, according to the company, has been reduced after NEA refused to sign PPA for 120 MW. The company has already invested Rs 1.30 billion on the project, according to the sources. It has already constructed a bridge over Likhu river, 46 kilometers of road and procured 450 ropanis of land. It has also prepared documents for inviting bids for civil, electromechanical and hydromechanical contracts. NEA and the company have signed PPA for 52.4 MW until May, 2016 at the rate of 5.99 cents per unit. The PPA will expire just before the Upper Tamakoshi Hydropower Project is scheduled to be completed. The agreement states that the rate can be raised up to 15 times at three percent.

    Construction of the project has yet to be started though the company had expressed commitment to start generation from January 1, 2015. The ministry had issued generation license in February 2012. The license of the project, to be constructed in build-own-operate-transfer (BOOT) model, is for 30 years.

    A study by the company has showed that the project will generate 534 million units of electricity a year. The project will be constructed in Ramechhap and Okhaldhunga districts around 220 kilometers away from Kathmandu. The company has already completed access road to the project. It will be constructed in Ragani and Pokali of Okhaldhunga, and Saipu, Bijulkot, Nagdaha and Tilpung of Ramechhap.

    Source : Karobar Daily