“We want to assure the people that the government is fully committed to construct the second storage hydropower project,” said the official.
The run-of-the-river project is the 40 MW Lower Solu in Solukhumbu district. Funds will be allocated in the forthcoming budget for early civil works for the two projects.
Under consideration are plans to mobilize at least NPR3 to NPR4 billion each from five or six government and private banks, according to the official. The government is going to bear the equity investment for the project as promoter while other rest financial costs will be mobilized via domestic banks and financial institutions, the source said.
“A separate company or department will be formed under the government for successful mobilization of capital resources,” he added. The same company or department will work for allotment of budget, time and working strategy for the successful implementation of the projects. The viability study and design work on both the projects are complete.
The government will spend local capital for the two projects as a policy to persuade local promoters in hydropower development.
The Ministry of Finance (MoF) is positive toward these two projects and is working to include them in the upcoming budget in July 2009. Bishnu Prasad Poudel, Minister for Water Resources has already informed about these two projects to Rameshwor Khanal, secretary at MoF.
Work on the 309 MW Upper Tamakoshi situated in Dolakha district started in January 2009. Likewise, the 20 MW Chilime in Rasuwa district has already been established as role model for local investment in hydro sector.
Other than the 92 MW Kulekhani in Makwanpur district, all of Nepal’s hydropower projects are run-of-river projects depending upon the water level in rivers for power generation. Power generation goes down by 36% in these projects during the dry season when water levels in the river drop, a yearly affair that severely cripples the nation’s national grid before monsoon.
