DOLAKHA, MAY 18 -
The formal laying of the foundation stone of the country’s largest hydro power project so far took place on Wednesday. Prime Minister Jhala Nath Khanal laid the foundation stone of the Upper Tamakoshi Hydroelectric Project (UTKHEP) in Lama Bagar, Dolakha, amid a function.
With this, the 456 MW project has formally entered into the construction phase. The power generated from the project is expected to be linked with the national grid within next four years. What makes this project special is it is the first large-scale hydropower project being constructed through domestic financial resources and its early completion will provide relief from ongoing power crisis.
The total estimated cost of the project is Rs 35.29 billion and is expected to be completed by 2015. The project completed its financial closure last week following the signing of a loan agreement between Nepal Telecom (NT) and the Nepal Electricity Authority (NEA).
Four domestic institutions—Employees Provident Fund (EPF), Nepal Telecom (NT), the Citizen Investment Trust (CIT) and Rastriya Beema Sansthan (RBS—have signed loan agreements with the project. EPF, NT, CIT and RBS are lending Rs 10 billion, Rs 6 billion, Rs 2 billion and Rs 2 billion, respectively. The government has also pledged Rs 11.8 billion.
Of the total project cost, 70 percent will be covered from loans and the rest will be distributed as shares to all shareholders of the project. According to the project, 10 percent of the shares will be provided to Dolakha locals and 15 percent to general public. The project has also already completed a power purchase agreement (PPA) with the Nepal Electricity Authority (NEA) which has 41 percent stake in the project.
As per the PPA, NEA will buy electricity at an annual average rate of Rs 3.50 per unit, considering 2010-11 as the base year of the project construction. However, it will have to purchase electricity at Rs 5.30 per unit in 2016 when the project completes.
Addressing the foundation stone laying programme, PM Khanal said arrangement of such a huge amount for the project in the domestic level was a big step forward and also shows a good indication for other possibilities in future. “A successful completion of this project will open new doors for domestic financing for other big projects,” he said.
The Prime Minister said the project is a milestone as it received support from all and is a role model for the country’s energy sector. He added the government will also attract foreign investment. “But we will give priority to domestic investors for making the country self-reliant.”
Deputy Prime Minister and Home Minister Krishna Bahadur Mahara assured full support from his party UCPN-Maoist, as the project is a model of local investment. Energy Minister Gokarna Bistra urged the political parties to keep aside political interests while working for the development of the power sector. He also committed to complete the project in stipulated time by working round the clock to avoid any possible fiascos like that of Middle Marsyangdi Project.
Top level government officials, including Information Minister Agni Sapkota attended the programme.
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