Chinese company agrees to invest 51 percent in West Seti Hydro-project

Chinese company agrees to invest 51 percent in West Seti Hydro-project
Nepalnews, 28-Dec-09

A Chinese government venture, China National Machinery Import and Export Company, has agreed to invest 51 per cent share in West Seti Hydro-project.

Director of West Seti Hydro-project Himalaya Pande told journalists in Kathmandu over a video conference Monday evening that he signed an agreement to this effect with president of the Chinese company Jia Zhiqiane this afternoon.

The agreement was signed in presence of Prime Minister Madhav Kumar Nepal, energy minister Prakash Sharan Mahat and foreign minister Sujata Koirala in Beijing.

After assurance of investment PM Nepal has directed energy minister Mahat to extend the license period of the project by one year. The license of West Seti Hydro-project was due to expire on December 31, this year.

The project is being constructed under an export plan where 90 percent of the production will be exported to India.

Ten percent of the production will be provided to Nepal for free for 30 years, and the entire project will be handed over to Nepal after that.

With the latest arrangement, the 750 MW West-Seti Hydro-project can go ahead without the investment of Asian Development Bank (ADB), which was considered one of the major investors for the project before this.

The estimated cost of the project is USD 1600 million. ABD had earlier showed interest for 15 percent share in the project beside loan to Nepal government for another 15 percent share. Australian company SMEC is another chief investor for the project.