Nepal Electricity Authority (NEA) and China Three Gorges Corporation (CTGC) have signed the joint venture (JV) pact for the construction of 750-MW West Seti Hydropower Project on Thursday. The agreement was signed at the central office of NEA in Kathmandu.

A team of CTGC arrived in Kathmandu today to sign the agreement.  The agreement was signed 10 months after the initial agreement was signed.

The preliminary JV pact was signed between NEA and CTGC for the construction of West Seti Hydropower Project on Jaunary 16, 2017.

Earlier, NEA had turned down CTGC’s proposal to revise down the installed capacity of West Seti Hydropower Project to 600MW from 750MW.

Terming West Seti as “one of the strategic projects of the country”, the state-owned power utility, which is also the joint-venture partner of the Chinese developer, said it should be built at its original capacity considering the national demand for electricity. 

During a tripartite meeting held between CTGC, Investment Board Nepal (IBN) and NEA in the second week of January, the Chinese company had suggested downward revision of the project’s capacity, citing the drop in water level in the river. 

In August 2012, the government and CWE Investment Corporation, subsidiary of CTGC, signed an MoU to construct the hydropower project. As per the MoU, the Chinese company will have a 75 percent stake in the joint venture company, while the NEA will hold the rest.

Of the 75 percent equity, CWE will allot 10 percent to locals residing around the project site. CWE also holds the right to float shares to the public in Nepal. However, it must keep at least 51 percent of the company’s shares, according to the joint venture agreement.