While
Nepal government is all set to organize another investment summit, Nepal Water
and Electricity Development Company (Korean) has threatened to pull out from
Nepal after the government asked it to contribute a hefty sum to a hedge fund
to be used as a cushion against exchange risk. According to newspaper, the
Korean company is ready to contribute only USD 5 million. I was curious if it is
sufficient to cover the exchange risk.
Santosh Thapa's Blog
This blog is mainly related to Nepal's hydropower potential.
Tuesday 8 January 2019
Sunday 12 August 2018
Wednesday 1 August 2018
Friday 6 July 2018
Upper Tamakoshi – a reality check for much hyped hydropower?
After long delays due to various reasons, Upper Tamakoshi
is now all set to float its local shares. According to its invitation letter,
the projected cost is estimated to be Rs. 66.08 billion. This makes per MW cost of
Rs. 14.49 crore. Although the per MW seems to be at the lower side compared to
recent market trend (above Rs. 20 crore), the project, however, will not able
to keep up its hype due to its lower PPA rate which is at Rs. 4.06 per kWh
(average) for the first year.
Wednesday 7 March 2018
Compensation clause for 30% dry energy.
With
new guidelines effective from this year, there is an option of 30% dry energy
for RoR projects. In this option, hydropower projects will receive NRs. 8.40
per kWh for six months (Mangsir 16 – Jestha 15) and NRs. 4.80 for the remaining
6 months (Jestha-16 to Mangsir 15). However, the total dry energy should be more
than 30% of the total energy supplied. Any projects suppling dry energy below
30% will be penalized. The formula for such compensation to NEA will be the
following
Wednesday 28 February 2018
Friday 9 February 2018
Financing capacities of Nepali banks
The total loan and advance of Nepalese commercial banks
stood at NRs. 1,801.567 billion at the end of Ashwin 2074 or mid October, 2017 (source: NRB). With
5% minimum lending requirement in hydropower sector as provisioned by Central
Bank of Nepal, the total loan available is NRs. 90.078 billion. On the other
hand, hydropower projects with install capacity of 2,043.6 MW have done the
financial closure while 910.31 MW are in the process of securing debt (NEA’s Annual Report 2017). Assuming NRs. 180 million per MW as the construction cost,
and 70:30 as Debt equity ratio, the total loan requirement is NRs. 372.19
billion. Even at the 10% as minimum lending requirement (assuming that Central
bank will increase the provision), the total funds available will be around
NRs. 180.157 billion.
Monday 22 January 2018
West Seti Hydropower in limbo
It looks like another company is going to pack its bag. China
Three Gorges International Corporation, the potential builder of West Seti
Hydropower Project (750 MW), showed dissatisfaction over the Power Purchase
Rate Policy proposed by Nepal Government. Storage project like West Seti is
entitled to receive NRs. 12.40 per kWh and NRs. 7.10 per kWh during dry and wet
season respectively.
Thursday 4 January 2018
Wednesday 8 November 2017
Election Manifesto
Having
a huge hydropower potential, all politicians, policy makers and experts have
come to a common understanding that hydropower development is a key determinant
of the growth potential of Nepali economy. As such, all major political parties
have declared to exploit the hydro resources in their election manifestos.
Friday 4 August 2017
Tuesday 13 June 2017
Thursday 8 June 2017
Wednesday 19 April 2017
Monday 13 March 2017
Foreign Investment Climate
All
of a sudden Nepal has been bombarded by summits. In the past few months,
different organizers have held several investment/infrastructure summits so
hastily. The objective of those summits was to attract foreign investment in
the country but the outcomes were not that satisfactory. However, ‘Investment
Summit 2017’ organized by Investment Board, Nepal last week did draw world’s
attention. Investors pledged a jaw-dropping FDI commitment of US $ 13.51
billion.
Sunday 5 March 2017
Govt plans to consider six months as dry season
Sunday 8 January 2017
Solar through my lens!
It
might be considered as a sin to talk about solar energy in Nepal. The country,
rich in hydro resources, is inclined to be blatantly loud and assertive in
self-defense. It is not everyone's cup of tea due to its expensive LCOE
(levelized cost of electricity). Name-calling is expected when you try to
explore the solar opportunity in this country.
Tuesday 13 December 2016
Thursday 8 December 2016
Wednesday 19 October 2016
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