Trishuli-1 is in Dilemma without PDA (Samachar Patra National Daily 20-10-2013)

Source: Samachar Patra National Daily (20-10-2013)

The construction of Upper Trishuli-1 2016 MW project is not started though the finalization of investors.  It is because the Ministry of energy has not started process for PDA with UT-1.

The ministry has made separate procedure for signing PDA with the projects less than 500MW. This commite includes Director General fro DoED, representatives from Finance, Law and Industry Ministry with the chair of Joint secretary Mr. Keshavdhoj Adhikari.  But the PDA procedure has been stooped since 6 months due to ministry itself.

Mr. Adhikari said that the PDA of UT-1 is not successful because of its strong and unreasonable procudure. He further said , "There is no any sepreate provision in law and regulations for PDA. There is no any sort of management for foreign and local investment. This project is of foreign investment is very intense. So it must be directed from upper level. "  He also agreed that all the procedures from Nepal Water and Energy Development Company has been completed but the problem of PDA is from Ministry.  The company has submitted the intention letter of loan investor for financial closure in the ministry.

The Generation license of the project was cancelled due to the pressure from former minister Mr. Baburam Bhattarai 05 July, 2012. The donor agency expressed its objection for government interferring while the project was working according to its regulation. Then as per the Electicity Act 2049 clause 35, the decision was made to provide GL after completion of necessary terms within 18 months. The work needed to be completed with 18 months are EIA, Access road construction, intention letter from investors, connection agreement etc which is already completed as  per the information from respective company.

The investors showed their disatisfaction for not signing PPA and financial closure due to problem of PDA.  The PDA procedure is not directed from Governement level because of which the project is unable to make financial closure and PDA.

The company has already submitted PDA fee of USD 320,000.00 in March. Non of the other project appealing for PDA has submitted this fee. One of the senior staff from ministry strongly said that some of the men are trying to fail the project which is already a secure project by Korean government. The time of 18 months added by the company has been completed and the company has requested for amanedment of certain clause. The director General Mr. Dilli Bahadur singh said that this decision must be made by Council of Ministers as per Electricity Act clause 35. He further said, " Company has completed everything from its side. Now the further action should be from council of misnisters.."

The company is sponsored by Korean Government company KOSEP with 50%, Daelim & kyeryong from Korea with 25% and IFC 15%. Similarly 10% share are separeated for local people. Asain world Bank, German Dez Bank, France Papacora and IFC has sstrongly commited to sponsor this project. The total estimated cost of project is 500 Million USD. Since its is foreign investment project, the another conflict is PPA in dollar.

Upper Solu 92MW, one of the supersix project is also in controversy due to PPA in dollar. One of the senior representative from Ministry said that," Government must make project from national resources otherwise it will create problem in PPA of foreign investment project." Mr. Adhikari said the problem occuring in finance of a country and  in NEA by dollar PPA must be identified and must minimize the loss. Governement has made PPA in dollar with Likhu-4 120MW, Upper Marsyangdi 50Mw, and Kabeli –A 37Mw.


Nepal Water and Energy Development Company Pvt. Ltd.

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Kathmandu, Nepal

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