SN Power has converted the idea of developing two hydro projects in the area into a single reservoir type project. Earlier, SN Power had planned to develop the 207 MW Tamakoshi-II on a run-of-river model and the 275 MW reservoir type Tamakoshi-III.

But we decided to convert them into a larger single reservoir project after studies showed that a combined one will be a better option, SN Power Vice President and Country Director Sandip Shah said.

The decision was taken following the findings of a detailed feasibility study and environment impact assessment (EIA) conducted by SN Power.

In its new design, the company has decided to lower the total dam height to 95 meters from its earlier design of 125 meters in view of possible danger from the reservoir to Singati Bazar, which comprises over 200 households.

The project can peak at 600 MW for four hours a day during the driest period of the year, according to Shah. In other times, it can generate 600 MW round the clock. The project will generate 2,450 gigawatt hour a year, Shah said.

The detailed feasibility study was still underway and was expected to be complete by October 2009.

As per Shah, talks were underway with international banks and financial institutions. The International Finance Corporation, a member of World Bank group, and the Asian Development Bank will lead the consortium.

SN Power was also prepared to construct a transmission line from the project site if needed. The Nepalese government said that it was constructing the Khmiti-Dhalkewar transmission line. If the government readies the transmission line by the time the project sees completion, the same grid will be used to transmit the power generated. Otherwise we will construct a 225-km transmission line on our own, Shah added. Construction of a 225-km transmission line will cost about $100 million.

Likewise, other projects with a total 2,000 MW capacity are in the development phase, Shah added.

Shah further continued that while the deepening global financial crisis is a major challenge for project financing, several other problems have to do with Nepal’s political situation, legal provisions and the security situation.

About 10,000 skilled and semi-skilled employees will be needed once construction work on the project starts in full swing. With a view to fulfilling the demand from local areas, we have planned to provide skill training to the locals from October-November, Shah said.