Affected locals to get Rs1.6b shares

Affected locals to get Rs1.6b shares

  • Upper Karnali hydropower project


 handout photo shows a general view of IBN’s board meeting on Sunday.

Jan 26, 2016- People residing in areas to be affected by the 900MW Upper Karnali Hydropower Project will receive shares worth Rs1.6 billion, Investment Board Nepal (IBN) has said.  A board meeting of IBN on Sunday decided to take a proposal in this regard to the Cabinet through the Ministry of Energy (MoE). IBN said the locals will be allocated the shares from the 25 percent free equity the government will get. As per the Project Development Agreement (PDA) between the IBN and India’s GMR-ITD Consortium, Nepal will get 27 percent free equity and 12 percent free electricity.

The free equity to be received by Nepal is estimated to be worth Rs145 billion while 12 percent free energy amounts to 108 MW. “People will get shares from the government’s 27 percent equity at par value of Rs100 per share,” said Khagendra Rijal, under secretary at IBN.
The meeting also directed MoE and IBN to update the board regarding the delay in the signing of PDA with China’s CWE Investment Corporation for the construction of 750MW West Seti Hydropower Project. The board has also sought information about the project’s latest status. Work on West Seti project has been hit due to indecision of Nepal Electricity Authority (NEA) over setting up a joint venture company with CWE. Although NEA had received a draft JV agreement from the Chinese from six months ago, it only replied recently, according to IBN. NEA was undecided about how it would invest in the project as an equity partner and from where it would generate resources as it is a loss-making entity.

The board has also decided to seek detailed report on the application filed by The Gorkha’s UK Ltd for generating 3,000MW wind energy within three months. “IBN will give a decision within a month from the date it receives the detailed report,” Rijal said. The board meeting also decided to approve the decision of Statkraft Holding Singapore to exit 650MW Tamakoshi III hydropower project and has directed IBN to conduct a study on whether to adopt Public-Private Partnership (PPP) model or some other models for the development of the project.