The meeting of Nepali Investment Board has approved the new Project Development Agreement (PDA) template for hydropower projects above 500 Mega Watt (MW) which will not only ensure investments worth 6 billion U.S. dollars but also solve current power crisis and generate employment in the country.
The caretaker Prime Minister Baburam Bhattarai, who chaired the recent meeting, expressed optimism about the accomplishment of the joint efforts of the Investment Board, the Ministry of Energy and related agencies to develop the PDA template, which will now provide a much needed impetus to enable negotiations on the current four priority projects, which will produce 3000 MW of electricity.
“Harnessing Nepal’s hydro resources for Nepal’s socio- economic transformation has always been my number one economic priority,” said Bhattarai, adding that the new PDA template will now equip Nepal with the capability to negotiate good hydropower deals and ensure maximum benefits in terms of revenue, spending, industrial and employment benefits, and electricity.
The agreement drafted by one of the world’s leading legal firms ensures balanced and bankable deals that fully benefit and protect Nepal’s interests.
The new template will currently be applicable to the four mega hydro projects.
The new PDA template comes as a response to the previous PDA model that was rejected by developers and financiers in 2010 for not being bankable, according to chief executive of the board Radhesh Pant.
“With the approval of the PDA template, we are now on a fast track to move on project agreements that will unlock the country’s vast hydro potential and solve the load shedding problem,” said Pant, adding that the board will present the PDA template to key developers in the next few days to enable both sides to lay the groundwork for intensive negotiations.
He also assured the developers that the board will be approaching the negotiations in a constructive and cooperative manner.
“We have the opportunity to bring in 6 billion dollars foreign direct investment, and create new opportunities for Nepali businesses and the labor force,” the chief executive was quoted by Friday’s The Himalayan Times daily as saying, adding that it not only solves the load shedding problem, but also addresses the country’s biggest obstacle to investment, business development and economic growth.
Due to lack of power-the engine for economic growth-the country is facing huge unemployment problems.
The Investment Board, as a leading agency representing the government, was set up in November 2011 as a one-window solution for foreign investors and developers investing in hydro projects above 500 MW and other infrastructure projects above 10 billion Nepali rupees (some 113 million U.S. dollars) to fast track projects and cut through bureaucratic obstacles and delays.
