Officials of China Three Gorges Corporation (CTGC), the potential developer of the West Seti Hydropower Project, are slated to visit Nepal soon to hold final talks with Investment Board Nepal (IBN) to expedite the reservoir-type project located in the country’s far western region.

Responding to an invitation sent by IBN last week, the Chinese company said that it was in the process of getting the go-ahead for the visit from its board of directors. “The Chinese developer has said that its representatives will visit us very soon to hold talks,” said Uttam Bhakta Wagle, spokesperson for IBN. “Currently, they are in the process of getting mandate from their board.”

Last week, IBN wrote to CTGC inviting it for talks as approved by a meeting of its board of directors. According to Wagle, IBN will hold final talks with the Chinese developer; and if they are found to be unwilling to take the project forward, the agreement signed with them will be terminated.

The 750 MW West Seti project has been languishing in uncertainty after CTGC said it would not go ahead with the scheme if the power purchase rate was not increased.

A few months ago, CTGC asked IBN to guarantee a rate of return of 17 percent on the project arguing that it would not be bankable at the power purchase rate fixed by the government.

As per the power purchase rate made public by the Energy Ministry in January 2017, reservoir-type projects like the West Seti will get Rs12.40 per unit during the dry season, which lasts from December to May; and Rs7.10 per unit during the wet season, which lasts from June to November.

After hearing CTGC’s position, IBN formed a committee last March to suggest possible ways to break the stalemate. The panel urged IBN to either scrap the deal or allow CTGC to construct the project after slashing the installed capacity to 600 MW as the Chinese company had proposed more than a year ago. During a meeting with IBN, CTGC had proposed decreasing the installed capacity citing a drop in the water level in the river. A recent study by the Nepal Electricity Authority (NEA), the state-owned power utility and venture partner of the Chinese company in the project, also showed that the installed capacity needed a downward revision to fulfil the minimum energy production requirement of 35 percent during the dry season due to a drop in the water level in the river.

IBN sources said the board would ask CTGC officials if they were serious about developing the project with the slashed installed capacity. If the Chinese developer agrees, it will be allowed to proceed with the project, according to the source. West Seti has been in limbo since CTGC subsidiary CWE Investment Corporation and IBN signed a memorandum of understanding to construct the hydropower project in August 2012.

It took more than five years to sign a joint venture agreement between CTGC and the NEA. As per the pact, the Chinese company will have a 75 percent stake in the joint venture company, while the NEA will hold the rest of the shares. The West Seti Hydropower Project will extend across Baitadi, Bajhang, Dadeldhura and Doti districts, and is expected to generate 2.8 billion units of electricity per year.