124 MW free energy sought from Arun III, Upper Karnali

124 MW free energy sought from Arun III, Upper Karnali
One project per developer
eKantipur.com, 6-Jan-08

The government is seeking a total of 124 megawatt (MW) of free energy from the 402 MW Arun III and 300 MW Upper Karnali projects, Minister for Water Resources Gyanendra Bahadur Karki said here on Sunday.
"A team that has been formed to negotiate the two projects with interested foreign companies will be tasked to seek 88 megawatts of free energy from Arun III and 36 megawatts from Upper Karnali, initiating negotiations with the companies in the order ranked by the taskforce led by Bhanu Prasad Acharya last year," Minister Karki said, briefing the press about last week's cabinet decision on the two projects.

This minimum free energy that companies will have to offer Nepal is based on the Cabinet's decision to prioritize free energy over all other criteria, as directed by the parliament's Natural Resources and Means Committee in July last year. The Cabinet decided to set the highest percentage of free power offered from each project as base requirement for awarding licenses.

Among nine proposals received for Arun III and 14 for Upper Karnali, Jindal Steel and Power has offered the highest percentage of free power from both the projects -- 21.9 percent (88 MW) from Arun III and 12 percent (36 MW) from Upper Karnali.

The taskforce led by Acharya last year rated GMR Energy Ltd, Satluj Jal Vidyut Nigam, Jindal Steel and Power, Reliance Energy Ltd, and Jay Prakash Associates, respectively, as companies with the five best proposals for Arun III, while the companies rated as having the five best proposals for Upper Karnali were GMR Energy Ltd, KSK Electricity Financing Private Ltd, Reliance Energy Ltd, Satluj Jal Vidyut Nigam, and Jindal Steel and Power, respectively.

A recently formed four-member team led by the ministry's Joint-Secretary Anup Kumar Upadhyay will negotiate with the companies in this ranking order.

Minister Karki also said the Cabinet has decided to award only one project to one developer. Also, while awarding survey license after negotiations, the government will take a non-refundable charge of Rs 100,000 per MW for both the projects.

For the 600 MW Budhi Gandaki, which could not attract good proposals in the bidding last year, the Ministry will invite another round of bidding soon.

Karki also said efforts are underway to take ahead the 309 MW Upper Tamakoshi project, for which the government has been trying to gather internal funds for the past one year.

The government is also seeking to import an additional 40 MW power from India to ease power cuts in the country, Karki added.