KATHMANDU, Jan 7: The government is finalizing terms and conditions with Asian Development Bank (ADB) and Japan International Cooperation Agency (JICA) for the development of Tanahun Hydro (140 MW) – the second largest storage-type hydropower project in the country — in the third week of January.
According to a highly place government official, officials of Ministry of Finance (MoF), ADB and JICA are holding a meeting on January 24 to finalize terms and condition for the development of the national pride project.
Confirming the development, Madhu Kumar Marasini, joint secretary and chief of Foreign Aid Coordination Division under the MoF, said the meeting would be crucial in sealing the deal between the government and development partners for taking the project forward.
“The meeting will finalize most of the terms and conditions associated with the project,” said Marasini.
ADB, JICA and European Investment Bank (EIB) have pledged soft loan to finance the project which was previously known as Upper Seti Hydropower Project.
According to the information posted on the websites of these three donors, JICA, ADB and EIB have pledged US$ 180 million, $150 million and $63 million, respectively, to develop the project.
As per the revised calculation, the project is estimated to cost $450 million.
If the construction of the project begins as planned in 2014, the project, which is based in Byas Municipality, will begin power generation by 2020.
Nepal Electricity Authority (NEA) will implement the project with the soft loans of three development partners. According to the project document, NEA will be the majority shareholder in the company — Tanahun Hydropower Company Ltd – that has been formed to implement the project.
“It is still uncertain how much stake will NEA hold in the project,” Sher Singh Bhat, spokesperson for NEA, told Republica. “The details of shareholding will be finalized once the government signs the deal with the development partners.”
Separate teams from ADB and JICA had visited Nepal couple of months ago to study the project. Members of the teams also held preliminary discussions with the concerned officials.
Thierry de Longuemar, vice president for finance and administrator of ADB, during his visit to Nepal in November 2012, had stressed the need to develop more hydropower projects in Nepal.
Source : Republica