Asian Development Bank to invest in Upper Seti hydro project

KATHMANDU, APR 08 -
The Asian Development Bank (ADB) has said that it is willing to invest in the 127 MW Upper Seti Hydroelectric Project located in Damauli in Tanahun district.
The government of Nepal and the ADB reached an understanding to this effect during ADB Vice President Xiaoyu Zhao’s recent visit to Nepal when he met with Prime Minister Jhala Nath Khanal and Finance Minister Bharat Mohan Adhikari.
“Vice President Zhao told the prime minister and the finance minister about ADB’s willingness to invest in the project,” said ADB Country Director Barry Hitchcock. “This project is attractive for us as it already has a road and other infrastructure,” added Hitchcock. As per the ADB’s estimate, the total cost of the project would be around US$ 300 million (Rs 21 billion).
On Dec. 23, 2010, the ADB and the government signed an agreement under which the bank would provide a technical grant of Rs 180 million to do a detailed study for the project. “The ADB could also issue a loan for the project,” said Hitchcock. According to the government, the ADB’s technical assistance will be used to conduct a detailed engineering study including development of design options, specifications and drawings for the civil works, development of design options, specifications and drawings for the electromechanical and hydro-mechanical works and transmission facilities and the bidding process.
In 2006-07, the Nepal Electricity Authority completed an upgrading feasibility study for the project with technical assistance from the Japanese government through JICA. After the detailed engineering study is finished in 2012, the project is expected to go into the construction phase. It is projected to be completed by 2016-2017 if everything goes as planned.
The Upper Seti is one of the few storage-type hydropower projects that has been identified as a national priority project by the government and recommended for further implementation by the last two national budgets.
When asked if the ADB would be willing to invest in the 750 MW West Seti Hydroelectric Project too, Hitchcock said the bank was positive about investing in it. “We’ve not talked about it,” added Hitchcock. “But if the government shows interest, we can discuss it.”
The government stated that the West Seti project located in Doti district would be constructed to address domestic energy demand when unveiling the energy crisis control programme. The programme has also envisioned constructing one 100 MW project each in the five development regions on a turn-key basis.
West Seti Hydro Power Company Limited (WSHPL), promoter of the West Seti Hydropower Project, had proposed building it under the public-private-partnership (PPP) model after failing to put together the required resources.WSHPL has filed an application at the Department of Electricity Development to extend the deadline for financial closure of the project. The ADB had earlier shown interest in the project.

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