IGI Logo

If everything goes as per plans, Indias NHPC will begin development of 480 megawatt Phukot Karnali Hydroelectric Project in Nepal.

According to some Nepali media reports, the Kathmandu government has decided to develop the project jointly with NHPC India and Vidhyut Utpadan Company Limited (VUCL), an undertaking of the government.

Surya Rijal, managing director of the company, said that the company has decided that 51 per cent of the project will be invested by NHPC and 49 per cent by the Power Generation Company.

"Our discussion has been going on for a year. The board had passed this decision earlier too. However, we couldn't make the decision. It should be approved by the Council of Ministers as well," he said.

Officials said that if negotiations will complete, it is likely that during the visit of Prime Minister Pushpa Kamal Dahal, Prachanda, to India, a memorandum of understanding (MoU) will be signed for the joint development of the project.

According to Rijal, this decision will be implemented only after the approval of the cabinet.

"We will send this decision to the Ministry of Energy very soon. We do not know when the ministry will take it to the cabinet and when it will be approved," he said.

According to him, NHPC had proposed to invest in Phukot Karnali in December last year.

Now NHPC has emerged as a key player in Nepal's energy sector.

NHPC Limited had signed an MOU with Investment Board Nepal (IBN) to develop the 750 MW West Seti and 450 MW SR-6 hydroelectric projects in Nepal in August last year.

The construction of the 480 megawatt Phukot Karnali hydropower project, for which a detailed study report (DPR) has been prepared, has not yet progressed.

The construction of the main structure has not been started for two years due to the inability to raise investment for the project, which is in a state of preparation and construction.

If approved by the Council of Ministers, a joint venture investment agreement will be signed with NHPC. In the feasibility study, it is mentioned that the project will cost Rs 92.3 billion and can be completed within five years of the start of construction.

The 480 MW electricity generated from here will be sold in India. The electricity of this project will be taken to India through the Karnali Corridor transmission line.

The National Transmission Grid Company has signed an agreement with the Indian company Kalpatru to construct a 400 kV transmission line in the Karnali Corridor.

India has also been entrusted with the construction of 900 MW Arun-III. Arun-IV of 490 MW, Lower Arun of 679 MW has also been entrusted by the Indian company.

According to the joint vision letter on energy cooperation between the Prime Ministers of the two countries in March last year, the Ministry said that the Phukot Karnali semi-reservoir project is going forward with the joint investment of government-owned organisations of both the countries. It is mentioned in the draft that NHPC will have to manage the market of the electricity generated from the project and the loan required to build the project on behalf of the promoter company.

If Nepal wants to consume the electricity of the project by itself, it will have the right to buy it. The project's electricity will be exported only when Nepal does not consume it.

It is proposed to capitalise expenses incurred in the project's license expenses, study and access road in the company the authority's share investment will be opened to build the project.