IBN for awarding Tamakoshi III through international bidding

IBN for awarding Tamakoshi III through international bidding

 February 11, 2017 01:00 AM Rudra Pangeni

KATHMANDU, Feb 11: Investment Board Nepal (IBN) has proposed to launch an international bidding for Tamakoshi III Hydropower Project.
It wrote to the Ministry of Energy (MoE) on Sunday, informing the latter of the detailed modality of such bidding. It has also forwarded reports of rapid assessment of the peaking run-of-river project which fell into IBN's lap after Norwegian firm StatKraft withdrew from the project in January last year, citing lack of viable demand and lower electricity price forecast, and insufficient transmission capacity for power evacuation. According to the IBN, energy generated by the 650-megawatt project, located in Ramechhap and Dolakha, will be consumed domestically.  The Norwegian firm had plans to export the energy generated by the project. Madhu Prasad Bhetuwal, the spokesperson for IBN, said that they proposed to go for international bidding as only this modality can give maximum benefits to the government.
The government got free energy as well as equity shares from Arun III and Upper Karnali as both the projects were awarded to developers through international bidding. The government had awarded both the projects to Indian developers in 2008. It signed project development agreements with the developers in 2014.

Arun III has agreed to give 21.9 percent free energy to the government, while Upper Karnali is giving 12 percent energy and 27 percent equity shares free of cost.
IBN's board meeting held on January 8 had decided to take the project forwarded by fixing development modality, conducting environmental study, completing acquisition of private and forest land required for the project, and building access road, among others. The meeting had also decided to hold needful consultations with MoE while setting the development modality. IBN has also planned to allot a certain portion of equity investment for domestic investors. “International bidding in the project of this scale can be the best modality for securing more benefits for the governments,” added Bhetuwal. The government has also earned up-front fee of Rs 450 million from six projects -- Solu (23.5 MW), Lower Solu (82 MW), Khare Khola (24.1 MW), Maya Khola (14.9 MW), Singati Khola (16 MW) and Mewa Khola (50 MW) -- through open bidding. Similarly, Kabeli A was also awarded to Butwal Power Company through open bidding. IBN also has proposed to work out procurement modality for the international bidding jointly with MoE.

Nepal Investment Summit 2017