DESPITE SEVERE LOCAL conditions and the difficulty of concluding viable power purchase agreements with neighbouring India, Nepal is pushing ahead with an ambitious domestic hydro power development programme.

At least 11 projects with a total combined installed capacity of 875MW are now in various stages of either private or public sector development. Feasibility studies for a further six schemes totalling 1476MW have also been contracted out.

The most advanced of the projects is the 144MW Kali Gandaki which, after two years of delays, is now expected to be commissioned in March 2002. It consists of a small ponding dam, desanding basin and intake structures at Mirmi on the turbulent Kali Gandaki river. These constructions feed the power house at Beltari, 124m below on the same river, via a 6km 7.4m diameter headrace tunnel.

The main delay to the project was caused by the need to cut and stabilise an entire hill above the desanding basin. Geological problems encountered during tunnelling and excavation of the 60m high surge tank at Beltari caused further delays.

The US$450M project is being developed by Nepal’s National Electricity Authority (NEA) with Asian Development Bank (ADB) and Japan Bank for International Co-operation (JBIC) finance. Tunnelling was completed late in January 2001.

The least developed projects, admittedly the majority, have still to achieve financial closure. However, prospective developers that have provided performance guarantees, which are reimbursable at financial closure, have been licensed.

Two other domestic projects, Andhi Khola (176MW) and Upper Arun (335MW), would now be under development for commissioning by 2010 if India had agreed to buy power from the 420MW Arun III export project. All three schemes would have been licensed to US merchant bankers EurOrient Investment Group with Arun III as the decisive factor. However, EurOrient was unable to conclude a PPA with India, before the last of three deadlines to submit its performance guarantees for the projects expired earlier this year. They are therefore now in limbo as Arun III runner-up ASTQ Holding Corporation of Canada tries its luck.

Domestic Nepalese hydro projects under development