Practical approach to get involved in Nepalese hydro for foreign investors

Department of Electricity Department (DoED) issues the survey license in first come first basis. Almost all the projects that are feasible technically and economically have been acquired. So the best practical option is to either do partnership with the local developer or to buy the project by paying lump sum amount to the developer. There is no universal method for determining the rate of the project as it largely depends on the project itself, project status and negotiation skills. However, Super Six projects can be taken into account for the basis. Government of Nepal awarded six projects to Nepalese private developers through competitive bidding in 2010 for the first time which is know as “Super Six”.

The following table shows the bid price (study level: feasibility) for super six projects.

Project Name	Capacity MW	Annual Energy GWh	Total Project Cost (NPR.)	Offered Value (NPR.)	Cost Per kW (1 US$ = 75 NPR)	%
Maya	5	40	917,250,000	30,500,000	2,446	3.3%
Singati	6	49.38	1,028,250,000	32,700,000	2,285	3.2%
Mewa	10	77.43	1,485,000,000	10,110,000	1,980	0.7%
Khare	14.7	90.43	2,154,000,000	50,700,000	1,915	2.4%
Solu	15	103.92	1,264,500,000	66,000,000	1,124	5.2%
Lower Solu	40	280.93	3,383,250,000	260,000,000	1,128	7.7%

*The cost estimate is based on 2010 price.

General trend is such that, if the developer has to acquire license from the private owner, a nominal fee in the range of 2% of the Project Cost has to be paid in the form of cash and equity depending on developers. Typically, the cash refund is paid to the developer for holding the license and study undertaken for that project. And the balance is converted into equity.