Three Gorges chairman in Nepal
The Himalayan Times
March 14, 2015
Kathmandu, March 13: An 11-member delegation led by Chairman of China’s Three Gorges Corporation, Lu Chun, arrived in Kathmandu today to take stock of the hydro project being built by a subsidiary of the Chinese company and discuss development of the 750MW West Seti Hydropower Project. His visit comes at a time when negotiations over development of the West Seti project have not been able to make much headway even after three years of signing the memorandum of understanding. In this regard, Lu will be holding meetings with all concerned stakeholders that can play a crucial role in laying the groundwork for development of West Seti project, including Prime Minister Sushil Koirala, the Ministry of Energy and the Investment Board Nepal (IBN). But prior to engaging in these talks, he is scheduled to visit a site in Kaski district where 25-megawatt Upper Madi project is being built by China International Water and Electric Corp, a subsidiary of Three Gorges Corp, a reliable source said. “Lu will leave for Kaski on Saturday morning and will return to Kathmandu on Sunday morning.”
On Sunday itself, Lu is expected to meet Energy Minister Radha Kumari Gyawali and CEO of IBN Radhesh Pant. He’s then scheduled to meet PM Koirala on Monday morning and leave for China the same day. “But the meeting could be rescheduled to Sunday because the PM’s schedule is said to be fully booked for Monday,” the source said. During meetings with PM Koirala, Energy Minister Gyawali and IBN CEO Pant, Lu is expected to seek commitment for the development of the West Seti Project, which is being built by CWE Investment Corporation (CWEI), a subsidiary of Three Gorges Corp. “If everything goes well, the Chinese company is mulling over beginning initial construction works, like drilling, before the start of monsoon,” the source said.The government formally handed over the West Seti project to CWEI in February 2012. Since then, the IBN — which deals with hydro projects of over 500 MW — has held several rounds of meetings with the project developer.
However, not much came out of these meetings because the Chinese company was initially concerned about the potential market to sell the electricity generated by the project, as Nepal Electricity Authority, the sole energy buyer here, did not show keen interest in signing power purchase agreement with CWEI, citing it had already roped in adequate power developers who can meet power demand of the country during wet season by 2017. It then started conducting a study on future energy need of the country, and was supposed to submit a final report on it to the IBN in early March, but has not so far. “However, the situation has totally changed with the signing of Power Trade Agreement with India, which allows the two neighbouring countries to buy and sell any quantum of electricity. So, the Chinese company is pretty optimistic about finding an appropriate market for the energy it generates, even if Nepal fails to consume it,” the source said.
Because of this, the company appears resolute about development of the project, and has filed an application for approval of foreign direct investment of around $1.6 billion to fund the project.The IBN’s next board meeting, which is likely to be held next week, is expected to approve the FDI request and allow the company to start preliminary construction work. Once this approval is extended, the company will register a firm here. The negotiations on project development agreement would then gradually begin. The West Seti project is located in the far-western region of the country and will spread in four districts — Doti, Dadeldhura, Baitadi and Bajhang. The project has the capacity to generate electricity for 24 straight hours throughout the year, except in dry season when power generating capacity is expected to dip to eight to nine hours a day.