Negotiation for PPP Projects

IBN is the implementing agency for the Government of Nepal for various public-private partnership (PPP) projects falling under its mandate. Negotiation is a critical component of such projects and having developed a world class Project Development Agreement (PDA) template, IBN is well-suited to facilitate the process.

  • 9 PDA Principles

  • Negotiation Services

9 PDA Principles

The 9 PDA Principles for export and domestic hydropower projects:

  • Meet Nepal’s electricity needs first (receiving a portion of output free and giving Nepal the option to buy additional power at commercial rates)
  • Capture for Nepal her fair share of economic benefits (royalties, taxes, equity stakes in projects and dividend returns) 
  • Ensure the optimal use of river basins (giving Nepal the right to allocate projects upstream and downstream)
  • Return hydro asset to Nepal in good operating condition (with elaborate handover requirements and oversight mechanisms)
  • Transfer project risks to the party best able to manage that risk (with clear allocation of risks to parties)
  • Ensure balanced deals (with a fair market return to the developer and financial as well as economic, industrial, employment and social benefits to Nepal)
  • Ensure high environmental sustainability and high safety standards (with mandatory compliance with international standards and a panel of independent experts to oversee implementation of design and operations as well as environmental mitigation plans)
  • Commitment to industrial and employment benefits (to provide full and fair opportunities to the Nepali supplier base and employment and skills development programmes)
  • Model community benefits package (following international best practices for local and community benefits and local shares to ensure local people have a stake in and benefit from the project)

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Negotiation Services

IBN has been involved in the negotiation of PDAs for various hydropower projects. This concession agreement was developed with the support and advice of various national and international experts and specialist law firms. The PDA follows the nine policy principles of IBN. Best practices from around the globe have been incorporated into the PDA to make the document bankable and attractive to investors from international markets. The highest environmental and social standards have also been incorporated in the PDA for acceptability across the globe.

Services provided by IBN while negotiating PPP projects are:

  • A team with the commercial and professional experience to negotiate such deals
  • A template PDA with strong fundamentals, which can be customised to suit different project specifications and commercial circumstances
  • Coordination and support from various government agencies
  • Continued support throughout the project cycle, e.g., obtaining guarantees to reach project financial close
  • Continued support to obtain necessary government approvals and fulfil government obligations
  • Provision of a comfortable handover process at the end of the concession period

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