Govt to finalize ToR for soft loan from EIB

KATHMANDU, Feb 11, 2013

The government is holding negotiations with the European Investment Bank (EIB) next week to finalize terms and conditions for soft loan of US$ 70 million for the construction of 140 mega watts Tanahun Hydropower Project.

“A team from EIB is scheduled to visit Nepal next week to finalize the terms and conditions for the soft loan,” joint secretary at the Ministry of Finance (MoF) Madhu Marasini, who also heads the International Economic Cooperation Coordination Division (IECCD), told Republica.

The government has already arranged a total of US$ 300 million soft loan from Asian Development Bank (ADB) and Japan International Cooperation Agency (JICA) for development of the project. “We will seek an additional US$ 70 million from EIB in the meeting scheduled for next week," Marasini said.
The government has already finalized terms and conditions for the soft loan with ADB and JICA. “The terms and conditions with EIB will be different from that of ADB and JICA,” said an official at the Ministry of Energy (MoE).

ADB has agreed to provide soft loan at 1.5 percent interest with 30 years of maturity period. Similarly, JICA has agreed to provide soft loan at 0.01 percent interest with 40 years of maturity period.

“The meeting with EIB team next week will dwell on finalizing interest rate and maturity period,” the official said. The second reservoir type hydropower project after Kulekhani will be developed by Nepal Electricity Authority (NEA) after the government arranges fund for the project.

Meanwhile, the government is also vying for a loan of US$ 30 million from Abu Dhabi Fund for Development (ADFD) for the development of the project. “ADFD has expressed interest in funding the Tanahun Hydropower Project. But any meeting with DFD has not been fixed so far,” said the official.

ADB, which is a lead funding partner, had provided US$ 25 million in grant assistance to prepare the detailed report (DPR) of the project. “The project design has been completed,” said project Chief Mahesh Prasad Acharya.

If everything goes as planned, the national pride project based in Bayas municipality of the Tanahu will start generating power by 2020. According to officials engaged in the negotiation process, ADB and JICA both also have taken Tanahun Hydro as a “prestige project”

Source: Republica

29 hydropower projects apply for construction licence

KATHMANDU, MAY 28, 2012

As many as 29 hydro-power projects, with a combined capacity of 2,463 MW, have applied for construction license at the Department of Electricity as of the 10th month of this fiscal year, record shows.

During the same period last year, only eight companies had applied for the license. “The surge in the number of applicants suggests that the ongoing power crisis will come to an end sooner or later,” said Dilli Bahadur Singh, director general at the department.  Hydro-power companies apply for construction license after they complete their financial closure, environmental impact assessment and power purchase agreement. Projects go into the construction phase after acquiring the license.

A majority of the projects are smaller ones. Of the 29 projects, only six are above 100 MW. Among the big hydro-power projects are Tamakoshi III (650 MW), Upper Marshyangdi (600 MW), Upper Trishuli I (216 MW), Kaligandaki Gorge Project (160 MW) and Upper Tamor (415 MW).

Tamakoshi III is being developed by SN Power and Upper Marshyandi by India’s GMR. The projects are currently waiting for power development agreement (PDA) negotiation. The negotiation for Tamakoshi III has been stalled for almost three years. The government on Saturday handed these two projects to the Investment Board to expedite their PDA negotiations.

According to the department, seven of the applicant projects have capacities between 10 MW and 100 MW. They include Nyasim Khola (21MW), Likhu II (55MW), Likhu I (77MW), Khani Khola (30 MW) and Lower Hewa project (10 MW).

Gyanendra Lal Pradhan, chairman of the Energy Council at the Federation of Nepalese Chambers of Commerce and Industry, said the growing number of license applicants was a positive sign. He, however, cautioned that some of the developers were not in a position to start construction because of low PPA rate. “They are only coming to the construction phase to protect their project development license,” he said.

Source: The Kathmandu Post

Biz houses plan big investments

KATHMANDU, APR 15, 2012

The government is eying big foreign investments in Nepal Investment Year (NIY) 2012-13, but the year 2069 will also see huge domestic investments.

With the peace process gaining momentum and political parties showing seriousness in drafting the constitution, the country’s leading business houses say they could start implementing their projects that were differed due to political uncertainties.

Hydro-power, tourism and cement are the areas on which business houses have set their sights. Given the government working on some mega-infrastructure projects in hydro-power, roads and aviation, the prospects of cement industries look brighter.

Realizing these opportunities, Saurav Group is gearing up to establish one of the country’s largest cement factories in Ramnagar, Nawalparashi with an investment of Rs 3.6 billion.

Murakra Organization is investing Rs 1 billion to enhance the capacity of its Arghakhanchi Cement Factory. Once it’s done, the factory’s daily output will increase to 1,600 tonnes from the existing 700 tonnes. “This will create employment for an additional 200 people,” said Pashupati Murarka, director of the organisation.

Murarka says hydro-power is another area where his group will get into. “Last year, we invested in Charnawati Hydro Project and this year, Lower Charnawati will be initiated” he said.

Chaudary Group, IME Group and Vaidya Organisation are the other business groups looking at the hydropower sector. Vaidya Organization President Suraj Vaidya, who is also the president of the Federation of Nepalese Chamber of Commerce and industry, said his group will invest $21 million in the hydro-power sector. Construction of a 12-MW hydro project near Pokhara will start soon. Vaidya is also investing in tourism, setting up a hotel in Pokhara. The 60-room hotel will be a wellness spa, according to Vaidya. “We are investing $5 million in this project.”

IME Group is also interested in the tourism sector. “We are making foray into tourism sector this year,” said IME Group Chairman Chandra Prasad Dhakal. He, however, did not divulge details.

The cash-rich Khetan Group’s priority is the service sector. Chairman Rajendra Khetan said his group will initiate an integrated project that includes a hospital, a medical college and a management college. “We will invest a minimum of Rs 1.5 billion in this project,” said Khetan.

Khetan Group also plans to consolidate its banking and insurance business and increase capital in its two insurance companies—Prime Life Insurance and Everest Insurance. “The service sector has always been our priority and we will extend this sector will full zeal this year,” said Khetan.

Jyoti Group is modernising Himal Steel that completed 50 years of operation last year. Director Saurav Jyoti said they will also foray into health sector. “We are yet to finalise the specific segment, but we will invest,” said Jyoti. The group has invested in Grande International Hospital being constructed in Dhapasi, Kathmandu and will invest Rs 150 million to set up a factory for medical equipment, according to Jyoti. Also on the card is a commercial agro farm in Birgunj.

HP Agrawal Group is investing over Rs 500 million to set up a sugar mill in the Eastern Nepal. “The new factory will provide employment to around 400 individuals,” said Manish Agrawal, director of the group.

Despite prolonged labour problem, Surya Nepal is working on its expansion drive. Ravi KC, corporate vice president of Surya Nepal, said the company will now venture into agribusiness. KC said the company will establish a dairy plant on the premises of its closed garment factory in Biratnagar. “Before setting up the dairy plant, we will launch a campaign to attract farmers towards cattle farming and instal milk chilling and collection centres across the country,” said KC.

Source: Kantipur