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China Daily Website

Nepal seeks more hydropower deals

Updated: 2012-04-04 08:23
By Zhou Yan in Boao, Hainan ( China Daily)

Nepal has extended a warm welcome to more Chinese hydropower companies to invest in projects worth $400 billion, following the approval of a $1.8 billion contract to China Three Gorges Corp.

"In terms of capital, nobody can compete with China," Binod K. Chaudhary, member of Nepal's constituent assembly and parliament, told reporters on Tuesday on the sidelines of the Boao Forum for Asia in Hainan province.

"The biggest opportunity for Chinese companies in Nepal is to build projects in the same manner as the West Seti project."

The Nepalese government has just approved Three Gorges Corp to undertake the $1.8 billion West Seti River hydropower project. The 750-megawatt plant has opened a "complete new chapter" for Chinese investment in its neighboring country, Chaudhary said.

China Datang Corporation, a State-owned power company, has also shown an interest in the Himalayan country's hydropower sector, said Sujit Acharya, convener of the energy development council under the Confederation of Nepalese Industries.

Nepal, which borders China and India, is acutely short of electricity. Compared with the 200,00-mw-capacity of untapped water resources, the country only has a generating capacity of 650 mw, according to Chaudhary.

With no public bidding for the West Seti project, there was great debate over whether the Nepal government should have called for a competitive tender, Chaudhary said, adding that other procurement models for future hydropower projects will be introduced.

The Export-Import Bank of China will provide loans of $1.8 billion for a period of 10 years for the project, in which Three Gorges Corp will hold a 75 percent equity, and the Nepal Electricity Authority the remainder, Acharya told China Daily.

The hydroelectric dam is expected to start construction in 2015 and could be in operation as soon as 2020, Acharya said.

He added that some of the electricity generated by the West Seti plant could be supplied to China, as Nepal was unlikely to absorb all the power, given the small size of the country.

Three Gorges Corp's rivals, including Sinohydro Corp, are also building hydropower plants in Nepal, but private companies from Europe and India are the major investors in the sector.

Chaudhary allayed concern that local residents may oppose the West Seti project because of environmental damage. Local people showed a very positive attitude, believing it would improve the area's infrastructure and living standards, he said.

In September, the Myanmar government suspended construction of the Myitsone hydropower station, a joint venture of the China Power Investment Group, Myanmar's ministry of electric power and a local private company, after local protests about possible damage to the environment.

The project is still on hold.

You can contact the writer at zhouyan@chinadaily.com.cn

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