Sino Hydro Sign Contract for Civil and Hydro Mechanical Works of Tamakoshi-5 Hydropower Project

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Kathmandu. China’s Sino Hydro Corporation Company has received the contract for the civil and hydro mechanical works of the 99.8 megawatt Tamakosi-5 hydropower project in Matthilla Tamakosi. Tamakosi Hydropower Company Limited, the promoter of the project, has awarded the contract for civil and hydro mechanical to Sino Hydro.

Sino Hydro had previously worked on the construction of 456 megawatts  hydro power plant. A contract was signed between the promoter company and the Chinese company Sino Hydro on Friday (10th May,2024).

According to the agreement, Sino Hydro will do civil and hydromechanical work for 12.99 billion rupees. Also, the joint venture (JV) company of Sino Hydro and Nepali partner Kumar Shrestha Nirman Seva has won the construction contract.

For the construction of the project, among the two companies that were selected for the technical proposal, Sino Hydro, which submitted the lowest amount in the financial proposal, was selected and got the contract. Among the participants in the procurement process, Sino Hydro and China International Water and Electric Corporation passed the technical proposal. Among these, Sino Hydro got the contract after accepting less in the financial proposal.

With the signing of the contract, the civil works will start within a month, said Vinod Bhandari, the chief executive officer of the company. According to him, the preparatory work has been completed.

The water coming out of the upper Tamakosi outlet tunnel will be directly diverted and brought to the Tamakosi-5 tunnel. This project is considered financially attractive as there is no need to build a dam for the project. The power purchase agreement (PPA) of this hydropower project has been completed. The goal of this project is to have a commercial production within 4 years.

The company had previously invited bids to select contractors for the construction of the project on July 25, 2022. Two of the 4 companies that expressed their desire to build the project were selected based on their technical proposals. In that contract, Sino Hydro Corporation Limited and China Gejuwa Group Company Limited were shortlisted. However, the financial proposal of both those companies was canceled after the cost of the promoter exceeded the estimate and the contract process could not proceed. Among these, Sino Hydro accepted the financial proposal less.

Estimated cost of Rs 21 billion 1395 million

The estimated cost of the project is 21 billion 139 million rupees and 65 percent of the loan and 35 percent of equity (equity) will be invested in the project. An investment model has been prepared so that 68 percent of the equity capital will be invested by the authority and 32 percent by ordinary citizens. An agreement has been concluded to invest Rs 13.74 billion in the project by the Employees Provident Fund. An agreement was reached with the fund on May 20.

Structure of the project

Tamakosi-5 is a cascade project of 456 MW Upper Tamakosi Hydropower Project through a subsidiary company of Nepal Electricity Authority. Without constructing its headworks, the tailrace water from the Upper Tamakosi power plant is sent directly to the tunnel.

Electricity will be produced by constructing an underground power plant in Suritar after constructing an 8 km tunnel of the project. The housing construction work of the project is going on at a slow pace. Structures including a 2 km long 220 kV transmission line will be constructed. All the structures of the project will be built in Vigu rural municipality ward number 1, 2, 3 and 4.