NEA’s plan to sign PPA in USD draws

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    KATHMANDU, Sept 23:

    NEA_BuldingThe employees unions of Nepal Electricity Authority (NEA) have given mixed reactions to the state-owned power distributor´s plan to sign power purchase agreement (PPA) with two hydro projects in US dollar.

    The NEA management had sought the opinion of the unions on the proposed PPA with Mewa Khola Hydropower Project (50 MW) and Lower Solu Hydropower Project (82 MW).
    NEA has proposed to pay the developers 55 percent of the revenue in US dollar for the first 10 years and remaining amount in local currency.

    Four employees unions have welcomed the proposal. “The new proposal is quite progressive compared to the previous ones where NEA had to pay the developers in US dollar for whole 30 years,” Ram Prasad Rimal, leader of NEA Employees Union, said. “We need to learn lessons from PPA in US dollar signed with Bhotekoshi and Khimti projects.”

    However, NEA´s National Employees Organization has expressed serious concern over the proposed PPA in US dollar. Issuing a press statement, it said the proposed agreement would be suicidal to the NEA.

    Both the projects are to be built with up to 90 percent foreign investment.  A study team led by NEA´s board member Laxman Agrawal had recently recommended to the NEA board to sign PPA with both the projects in US dollar. The team had also suggested fixing exchange rate at Rs 90 per US dollar.

    The two projects are a part of super six projects that the government awarded to developers through open bidding. However, the process to sign PPA with the developers has been pending for the past two years.

    Source : Republica