While the Investment Board Nepal (IBN) was gearing up to launch international bidding to develop the much-awaited Tamakoshi 3 Hydropower Project, the Energy Ministry is all set to award the project’s survey licence to TBI Holding, a company owned by Bhaban Bhatta, newly elected president of the Non Resident Nepali Association (NRNA).

Bhatta had filed an application at the Department of Electricity Development (DoED) on October 11  to obtain the survey licence for the 650 MW project. The department took less than a week to approve the application, which has now been forwarded to the Energy Ministry for final approval.

“The documents presented by TBI Holding along with the application were complete. Hence, the department has forwarded the application to the ministry, recommending that survey licence be awarded to the company,” said DoED Spokesperson Babu Raj Adhikari. “As the survey licence of the hydropower project with installed capacity above 100 MW has to be issued by the ministry, the final decision will be taken by the ministry.”

The recent development comes at a time when the government has authorised the IBN to implement hydropower projects with installed capacity of 500MW or above. As per the Investment Board Act 2011, the IBN has sole authority to implement project of 500MW and above.

Investment Board Nepal (IBN) had prepared a modality for the construction of the project under the public private partnership (PPP) model with a mix of domestic and international investments after the potential developer Statkraft of Norway pulled out from the project in January 2016. The board had forwarded the proposal to the ministry in April, seeking suggestions. 

While the board was waiting for ministry’s response, the DoED, as per the instruction of the Energy Ministry, initiated the process of implementing the project, breaching the provisions of the Investment Board Act.

“We are still waiting for the ministry’s response,” said an IBN official. “But we have received information from various sources that the ministry is all set to award licence to a company without initiating the bidding process. This is illegal and will weaken the IBN.” Although around half a dozen foreign companies were interested in building the project following departure of the Norwegian company, the IBN had asked them to wait until global bidding starts. “If the project is awarded without bidding, it will tarnish the image of Nepal as an investor-friendly destination,” said the IBN source.

Statkraft had signed a project negotiation agreement with IBN, but left just before project development agreement (PDA) negotiations began. The Norwegian company had spent Rs1 billion to conduct a survey, obtain technical updates and perform environment impact assessment after receiving a survey licence from the government in March 2007.

Officials said it had abandoned the project over concerns about finding buyers for the electricity produced by the project. Statkraft had planned to sell energy in India. 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