KATHMANDU:- GMR Upper Karnali Hydropower Limited, which is developing the Upper Karnali Hydropower Project, has expressed its commitment to conclude the financial closure (FC) and power sale agreement (PSA) within the approved timeline given by the government of Nepal.
The Cabinet meeting had recently decided to give the Indian company, GMR Group, two years to generate funds for the ambitious 900 MW Upper Karnali Hydropower Project.
Earlier, the 51st meeting of the Investment Board Nepal (IBN) held on June 6 under the chairmanship of Prime Minister Sher Bahadur Deuba, had recommended to the Cabinet of Ministers of Nepal that it extend the deadline under a condition that the developer of the Upper Karnali Hydropower Project, GMR, completes the financial management within 24 months.
Based on the recommendation, the meeting of the Council of Ministers held on July 15 decided to extend the deadline by two years.
Out of the two years, six months have been given to ensure the sale of the electricity produced from the project through the power sales agreement (PSA) and 18 months for financial closure.
“The financial extension approved by the Cabinet of the government of Nepal is a strong proof of full support and appreciation of our efforts towards successfully developing a tri-nation transformational export-oriented hydropower project, which will supply power to Nepal, India and Bangladesh,” said Srinivas Bommidala, chairman, Energy and International Airports, GMR Group.
With this development, they can now move forward towards achieving the remaining pre-FC milestone and complete the process within the approved timeline, he said, according to a press statement of the GMR Group.
He said that they are committed to delivering this project as per the commitments made to the government of Nepal.
“Meanwhile, we have finalised and initiated the PSA jointly with the Bangladesh Power Development Board of government of Bangladesh and NTPC Vidyut Vyapar Nigam (NVVN) for the supply of 500 MW to Bangladesh out of our 792 MW of saleable capacity,” Bommidala said.
Most of the generated power is set to be exported to both Bangladesh (about 500 MW) and India (another 292 MW).
The remaining 180 MW will be provided to Nepal free of cost. GMR will give a 27 per cent share of the project to Nepal Electricity Authority.
“We are also committed to conclude this PSA within the approved timeline,” he said.
Even after almost eight years of signing the Project Development Agreement (PDA) of the Upper Karnali Hydropower Project, GMR has not been able to complete PSA and financial closure of the project.
A PDA was signed between the IBN and GMR in September 2014. The GMR Group was awarded the Upper Karnali Hydropower Project in 2008. The estimated cost of the project is about USD 1.5 billion.
The company claimed that the discussions and process to make financial closure with the many potential banks have been going on and expected to be completed within the stipulated deadline.
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