Himal Hydro receives generation license for Middle Modi hydro project

The government has granted generation license to Middle Modi Hydropower Project (15.1 MW) based in Parbat district.
The Department of Electricity Development (DoED) decided to issue generation license to the project after its developer expressed commitment to achieve financial closure within a year of receiving generation license.
According to Gokarna Raj Pantha, senior divisional engineer at the DoED, the Middle Modi Hydropower Limited (MMHL), a subsidiary of Himal Hydro and General Construction Limited, is developing the project.
"The DoED has decided to grant conditional generation license as the developer has assured us that it would demonstrate bank guarantee within a year,” Pantha told Republica.
The run-of-the-river type project that is estimated to cost Rs 2.3 billion has already signed power purchase agreement (PPA) with the Nepal Electricity Authority (NEA).
According to Pantha, the project has agreed to sell power generated by it at Rs 4.80 per unit during wet season and Rs 8.40 per unit during dry season.
The power generated by the project can be linked to the national grid by developing a 4-km 132 kV single circuit transmission line from the plant site to NEA sub-station at Patichaur in Parbat.
Meanwhile, sources privy to the development told Republica that banks are reluctant to invest in the project. “But the developers are trying to get financial sources for the project," a source said.
Himal Hydro, which has already developed more than a dozen small hydropower projects, including Tinau Hydropower (1 MW) and Tatopani Small Hydro Project (2MW), has already completed environment impact assessment (EIA) study of the project.

DoED may develop Budi Ganga hydro project

he government is mulling over handing over the task of implementing Budi Ganga (22 MW) hydropower project to the Department of Electricity Development (DoED).
“We are preparing to hand over the task of implementing the project to the DoED through the fiscal policy for the upcoming fiscal year 2013/14,” an official at the Ministry of Energy (MoE) told Republica on Friday.
This is the first time that the department, which has been assigned the task of issuing hydropower licenses, is getting the task of implementing a hydropower project after Nepal Electricity Authority (NEA) came into being.
“Few months ago, we had submitted a proposal to the ministry requesting it to give us project implementation task as well,” Madhu Prasad Bhetwal, senior divisional engineer at the DoED, said. “The project will be handed over to us once the government adopts the policy of investing on hydropower projects on its own through the fiscal policy for 2013/14.”
The government has decided to seek loan assistance from the Saudi Fund for Development (SFD) and Kuwait Fund for Arab Economic Development (KFAED) to implement the project that is estimated to cost around US$ 55 million.
The SFD has agreed in principle to provide loan assistance to the government for the project. "The government signed $18 million loan assistance agreement for the project with KFAED in March,” added Bhetwal.
The government is yet to allocated funds for the project based in Achham district in the far-western region.
“If everything goes as planned, the government will allocate necessary amount for the project in the upcoming budget,” said Bhetwal.
The project is among the many hydropower projects identified under the medium-scale hydropower project study conducted in 1998. The DoED aims to complete the project by 2019.
“We will conduct environment impact assessment (EIA) study once the project is formally handed over to us," Bhetwal said.
However, sources at the energy ministry say Nepal Electricity Authority (NEA) is against the idea of allowing the DoED to implement the project. “NEA fears that if the DoED is allowed to implement projects, it will not let the former implement the comparatively better projects in terms of cost and rate of return,” an energy ministry source said, quoting NEA officials.