Print Edition - 2016-10-18 | MONEY
Chinese team coming for West Seti talks in Nov
The team will be arriving to finalise the JV negotiations. After the JV company is incorporated, it will start the construction
Oct 18, 2016-Officials of China Three Gorges Corporation (CTGC) are scheduled to visit Nepal in November to continue negotiations to form a joint venture company with the Nepal Electricity Authority (NEA) to build the West Seti Hydroelectric Project.
The proposed 750 MW reservoir-type project will be spread over Baitadi, Bajhang, Dadeldhura and Doti districts in far west Nepal. It is estimated to cost $1.6 billion.Investment Board Nepal (IBN) said that a team would be arriving in early November to finalise the joint venture (JV) negotiations, as per a communication received from CTGC last week.
“We have asked CTGC to sent its senior officials to Nepal by October with a mandate to conclude the JV deal,” said Maha Prasad Adhikari, CEO of IBN. “However, it said that it wouldn’t be able to send a team in October as its officials were on another mission and promised to send one in November.”
As per the memorandum of understanding signed between IBN and CWE Investment Corporation, a subsidiary of CTGC, in August 2012, the Chinese company will have a 75 percent stake in the JV company, while the NEA will hold the rest of the stock.
After the JV company is incorporated, it will start the construction of the hydropower project. IBN has not been able to seal a JV agreement with CTGC despite receiving a draft accord more than a year ago due to the NEA’s reservations. The state-owned power utility body cited lack of resources to buy shares in the planned JV company.
Earlier in March, CTGC officials had visited Nepal to conduct JV talks but they were inconclusive.
Yao Sexiong, general manager of CTGC’s investment department, and Sylvia Li, CTGC’s business manager, represented the Chinese company.
Senior NEA officials Sher Sing Bhat, Gokarna Sharma, Jagdishwar Singh and Anil Ratna Tuladhar represented the authority at the meeting facilitated by the IBN.
During the meeting, the NEA had asked for the terms and conditions of the soft loan that CTGC had promised to arrange for the NEA and the timeframe within which the loan deal would be signed. The NEA’s demand was designed to legally bind CTGC regarding its commitment to arrange funds.
“The NEA expects to receive the terms and conditions of the loan from CTGC before the JV agreement is signed so that they are inserted in the agreement creating a legal obligation,” said an IBN source.
“CTGC has given indication that it is ready to address the NEA’s concern.” So there are good chances the pact will be signed in November, the source added.
In April 2014, the Finance Ministry had written to the Chinese government asking for $400 million in soft loans to allow the NEA to be an equity partner in the JV company and build a transmission line to evacuate the power
generated by the plant. But no headway has been made on this front.
Published: 18-10-2016 08:30