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Tamakoshi 3 hydro project stuck in limbo

- BIBEK SUBEDI, Kathmandu
The IBN had proposed to develop the 650MW hydropower project under public private partnership (PPP) model

Jul 23, 2017-

The Investment Board Nepal’s (IBN) plan to initiate global bidding process to develop the much-awaited Tamakoshi 3 Hydropower Project is in limbo, as the government has failed to approve the project’s implementation modality.

The IBN had proposed to develop the 650MW hydropower project under public private partnership (PPP) model with a mix of domestic and international investors.

Initially, the IBN had floated a plan of offering 25 percent stake in the project to domestic investors and locals affected by the project. The IBN was planning to extend the rest of the shares in the project to international investors selected through international competitive bidding.

But the IBN’s plan got jabbed after the Energy Ministry showed interest to engage itself in the project.

When the IBN management presented the development modality of Tamakoshi 3 for approval at the 25th board meeting, then Energy Minister Janardan Sharma sought the role of the

Ministry of Energy in project development.

Subsequently, the IBN submitted a plan to the ministry as per the request of the minister.

“It has been more than two months since we submitted the plan, but we are yet to hear from them,” said an IBN source. “Recently, we wrote another letter to the ministry and asked it to make a quick decision.” The government should either build the project on its own or allow the IBN to go ahead with its plan, the source added.

After the potential developer Statkraft of Norway pulled out of the project in January 2016, around half a dozen foreign companies have shown interest to build the project. The IBN has asked them to wait until preparations are complete and global bidding documents are floated. “We can’t make the developers wait for long,” said the source.

Energy Ministry’s spokesperson couldn’t be reached for comments despite the Post’s repeated attempts. 

Statkraft had initially signed a project negotiation agreement with the IBN to build the project. But it left the project just before negotiations on project development agreement (PDA) began. The Norwegian company had spent Rs1 billion to conduct a survey, get technical updates and carry out environmental impact assessment after receiving a survey licence from the government in March 2007.

According to multiple sources, the Norwegian company abandoned the project mid-way due to concerns over finding potential buyers of the electricity produced by the project. Statkraft had planned to sell energy to India as the power trade agreement (PTA) had been signed with the southern neighbour. But it lost hope after India imposed a trade blockade and relations between the two countries soured. Tamakoshi 3 is a run-of-the-river project located in Dolakha and Ramechhap districts east of Kathmandu.

Published: 23-07-2017 08:38

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