Investment Board nod for major infra projects

KATHMANDU, NOV 22 - The Investment Board Nepal on Friday approved Rs144 billion in foreign investment, with the IBN board meeting chaired by Prime Minister Sushil Koirala deciding to forward the project development agreement (PDA) draft for the Arun III hydropower project.

Before the Cabinet approves the PDA for the Rs104 billion hydel project, there will be some minor changes to the wording of the draft. The board also endorsed the Rs40 billion investment proposal of Reliance Cement Industries, India.

This paves the way for an agreement on the much talked about 900 MW project between the IBN and the Satluj Jal Vidyut Nigam on the sidelines of upcoming Saarc Summit, with Indian PM Narendra Modi witnessing the signing.

Before presenting the draft to the Cabinet on Monday, the IBN will hold a discussion with the top leaders of the major political parties and incorporate their inputs. Sunday’s meeting will be chaired by PM Koirala.

“Since we had a framework for the PDA in place, it wasn’t very difficult to reach the conclusion,” said IBN Chief Executive Officer Radhesh Panta. “There will be some minor corrections on some specifics before the draft is forwarded to the Cabinet.”

As per the agreement between the IBN and Satluj, Nepal will receive 21.9 percent free energy--197 MW. Satluj would study the impact upstream and downstream within six months of PDA signing. According to Panta, Satluj’s obligations are similar to GMR’s that recently concluded PDA negotiations for the Upper Karnali Hydropower Project.

National Planning Commission Vice-chairman Govinda Raj Pokharel said the Cabinet would approve the PDA draft on Monday. Satluj has agreed to issue shares worth Rs1 billion to local residents. Fifty percent shares would be allocated within two years after the construction work begins. The remaining shares will be distributed by charging a premium.

“Shares worth Rs100, for instance, will be sold at a premium price not exceeding Rs250,” Pokharel said, adding that the amount could be lower too as set after a discussion with the government.

Similarly, endorsement of the Reliance proposal has opened the way for the company to establish itself in Nepal and to purchase mines. The company has proposed to manufacture 2.3 million tonnes of cement annually, employing more than 3,000 people.

The IBN meeting also decided to extend the project negotiation agreement for the Tamakoshi III hydropower project by six months. Other decisions include short-listing probable companies for setting up a chemical fertilizer plant and conducting a detailed project report for solid waste management.

Posted on: 2014-11-22 08:56