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Upper Tamakoshi set to roll, finally
KATHMANDU, JUL 30 -
After more than a year of being in the doldrums owing to fund crunch, the construction of the 456-MW Upper Tamakoshi Hydro Electricity Project (UTHEP) is likely to pick up pace.
Employees’ Provident Fund (EPF), one of the largest lenders for the project, on Friday signed a tripartite deal with Upper Tamakoshi Hydropower Limited and the Nepal Electricity Authority (NEA) to lend Rs 10 billion as a long-term loan for the construction of the country’s so far largest hydro project.
The total estimated cost of the project is Rs 35.29 billion and it is expected to be completed in 2015. UTHEP, located in Dolakha district, is the first project being commissioned through the mobilisation of national capital in the country and will be the cheapest project as yet.
Of the total project cost, 70 percent is loan and the remaining amount will be distributed as shares among all shareholders of the project.
“The agreement has cleared the uncertainties about the success of the project. Today is a big day for every one of us,” said Energy Minister Prakash Sharan Mahat after signing the agreement on Friday. Similar agreements will be signed with other lenders within a week, he said.
According to Mahat, though construction of the project was to start in June last year and was expected to be completed by 2013, due to lack of timely and inadequate fund it was delayed by more than a year. “Now, there is no any reason to stop the successful construction of the project within the given time. I am confident that this project will set an example and encourage local investors to invest in hydro sector,” he said.
Earlier, besides the EPF and the government of Nepal, Citizens Investment Fund (CIF), National Insurance Corporation and Himalayan Bank Limited representing a consortium of local banks had pledged to invest in the project. Later, Himalayan Bank that had pledged to lend Rs 6 billion refused to abide by the terms set by the NEA for investment while EPF demanded that the NEA increase the Power Purchase Agreement (PPA) rate in case the project was not implemented on time. CIF demanded provision of shares for the lenders as a part of the deal. After the banks withdrawal, Nepal Telecom agreed to invest Rs 6 billion rupees in the project.
Mrigendra Bahadur Shrestha, project director of UTHEP said that besides financial crunch the project suffered problems during construction of access roads.
He said the civil construction works of the project will start from this year as the NEA has awarded the job to a Chinese company and is ready to sign the contract agreement early next week.
Posted on: 2010-07-31 09:06
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