Nepal addresses Chinese hydropower contractor's concerns

KATHMANDU - The government of Nepal has addressed the demands and concerns expressed by the Chinese developer of the West Seti Hydropower Project in the South Asian country, the Investment Board of Nepal (IBN) said on Wednesday.

The IBN, an agency to commission hydropower projects, said it has also received written commitments from relevant ministries towards addressing the issues raised by CWE Investment, a subsidiary of the China Three Gorges Corporation, one of China's largest hydropower developers.

CWE Investment is developing the 750 MW West Seti Project in power-hungry Nepal.

The Chinese company in the first week of October asked the IBN to take care of a number of issues directly linked with the project construction including land acquisition, resettlement of project affected people, the transmission line plan and the power purchase agreement rate.

"The IBN and the ministries including the Ministry of Land Reform and Management, Energy Ministry and Finance Ministry have agreed to resolve the issues demanded by the project developer," IBN Joint Secretary Mukunda Poudel told Xinhua.

He said his agency has received a written commitment from the mentioned ministries, except for Finance Ministry. In the commitment, the ministries have outlined their roles during the project construction and promised to fulfill them at any cost so as to ensure the implementation of the project.

The project to be developed under the financial and technical assistance of the Chinese government is expected to cost a total of $2 billion.

The Exim Bank of China has agreed to offer soft and commercial loans worth $1.6 billion for the construction of the project.

"We will receive the commitment letter from the Finance Ministry this week. Compiling all of the commitment letters we will correspond with CWE next week asking the contractor to get ready for project development," Poudel added.

CWE Investment has been seeking government commitment in the above mentioned areas for the last two months while the Nepal government has not been able to resolve the issue. As a result, the company and the IBN have not been able to develop a working plan for the project, which also prompted doubts against the successful implementation of the project among the stakeholders.

"West Seti is a crucial project for Nepal. Since the Nepal government is committed to play a supportive role in every aspects of the project development, we request the developer to begin work soon with full morale and without fear of anything," a high ranking official at the Prime Minister Office said in condition of anonymity.

According to a memorandum of understanding signed by the Nepal government and CWE Investment in August 2012, the project would be completed by 2019. However as construction has not begin, there are speculations that the project might not be completed as planned.

The government of Nepal has enlisted West Seti as a top priority project, hoping this mega hydro project can be a remedy to this Himalayan country where people suffer from power cuts up to 16 hours a day during the winter season.