NIB pushes PDA for 4 big hydropower projects

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    Power development agreementsKATHMANDU, Feb 8: The government is set to take crucial decisions on expediting key infrastructure projects, including finalization of project development agreements (PDAs) for four mega-hydropower projects, laying the groundwork for a chemical fertilizer project, and conducting a feasibility study for a Kathmandu metro railway.

    The secretariat of the Nepal Investment Board (NIB) is submitting proposals on these projects during a meeting of its board of directors (BoD) scheduled for next week.

    Issues that top the meeting agenda include finalizing PDAs for the 650 MW Tamakoshi III, 900 MW Upper Karnali, 600 MW Upper Marsyangdi and 900 MW Arun III.
    NIB, which is under pressure from line ministries to facilitate implementation of the projects, has been working on finalizing the PDAs with the major power developers, namely, Sutlej Jal Vidyut Nigam, GMR and SN Power.

    Sutlej is developing Arun III, GMR is engaged in the development of Upper Marsyangdi and Upper Karnali and SN Power, a Norwegian power developer, is developing Tamakoshi.

    “The meeting will also discuss and probably take a decision to conduct a feasibility study on a chemical fertilizer production factory in the country, and to take the Kathmandu Metro Railway project forward,” a source close to the Office of the Prime Minister and Council of Ministers (OPMCM) told Republica on Wednesday.

    “The NIB secretariat is planning to secure authority from the Ministry of Finance to ask for a budget from the K2 fund — a fund provided by the Japan government to develop the agricultural sector — for conducting a feasibility study for the chemical fertilizer factory,” the source said.

    According to the source, the meeting will also give a nod to the secretariat to ask Nepal Metro Private Limited (NMPL) to develop a detailed proposal for a feasibility study on the project.

    NMPL, a company that claims to have lined up international financing for a Kathmandu Metro Railway, had offered to develop the project in August 2012.

    Additionally, the secretariat is also mulling over giving impetus to a waste management project in Kathmandu Valley. “The scheduled meeting of the BoD will also take a decision to allow the secretariat to take the waste management project forward,” the source disclosed.

    In December 2012, the BoD, which is chaired by Prime Minister Dr Baburam Bhattarai, had taken more than half a dozen decisions related to hydropower, including allowing Indian power developers GMR and Sutlej to increase their capital and set up offices in New Delhi.

    Sutlej, a state-owned hydropower developer, has been in constant communication with the NIB secretariat to finalize the PDA for the project. “However, it has some reservations on the PDA template which is on the verge of finalization,” the source informed.

    NIB, which was established more than a year ago to expedite the implementation of mega-projects including hydropower (above 500 MW) in a fast-track mode, is developing a PDA template with the help of Herbert Smith, a legal advisor based in London.

    Source : Republica