Nepal’s 750 MW Hydropower Project High Voltage Resource Tensions

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Researched by Industrial Info Resources (Sugar Land, Texas). A hydropower project ‘on top of the world,’ which has been held up for a decade by a Maoist insurgency and political instability, is ready to take off. The 750 MW project in Nepal’s remote Doti district has a 25-year power purchase pact with India’s Power Trading Corporation (PTC) and the company driving the project, West Seti Hydro (WSH), has been given a 30-year operating license.

The $1.2 billion project will deliver power to the Indian high voltage grid with a transmission line to Bareilly in India. This will be a welcome power supply lifeline to the Indian states bordering Nepal which suffer from chronic power shortage. In 2003 WSH signed a power purchase agreement to sell all the power generated by the project, 3,600 GWh (gigawatt hours) to PTC.

The Asian Development Bank (ADN) has said that the power project will change the face of India’s far western district which is one of the country’s most neglected and inaccessible regions. But sharing water resources with India is a highly sensitive issue in Nepal and a time when the country is facing an acute power shortage the fact that the entire power output would be sold to India created a hostile domestic reaction. Under the terms of the deal Nepal will earn 10% of the annual revenue from power sales.

William Bultritude, Managing Director of WSH, said that supplying Nepal’s power load centers is not viable as the load centers are too far away from the project site and there are no transmission links. Nepal initially had claimed 10% free energy from the scheme but settled for a share of the revenue after the ADB came in as mediator.

Currently a dialogue is going on between WSH officials and political leaders from the region, NGOs, student leaders and other stakeholders over a number of related topics including the displacement of 1,500 families for which resettlement plans still have to be approved, reports Newspost India.

WSH is wholly owned by Australia’ Snowy Mountain Engineering Corporation (SMEC) (Cooma, New South Wales) which has been developing hydropower projects since the 1960s. Shareholders in the project include India’s Infrastructure Leasing and Financial services and the Nepal government, both holding 15%. WSH (Hong Kong) holds 26%, ADB 15%, China’s National Machinery Import Export Corp 15% and a consortium of Nepali financial institutions holding the balance of 14%.

Emerging from an environment of political tension, this project, crucial to the power supply and development of the client region, and backed by a global assortment of interests, is a model example of the tensions and priorities, which will engage scarce water and power resource projects from now on.

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