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Anil Sasi

New Delhi, July 20 A $1.25-billion hydroelectric project is coming up in Nepal, which is being promoted by an Australian engineering firm, with design and building work to be carried out by a Chinese state-owned firm, while primary power evacuation will be taken up by an Indian state-owned company.

The 750-MW West Seti power project coming up in Nepal is being touted as a major international co-operation success story. Over 90 per cent of 3,251 million units of electricity expected to be generated from the project, post-commissioning, is set to flow into India.

The PPA for the project, which would be the largest single foreign investment so far in Nepal and marks a debut of sorts for Indian firms in Nepal’s power sector, was initialled here on Thursday by SMEC, the Australian project sponsor, and PTC India Ltd.

“This is a landmark project in terms of the level of inter-regional co-operation involved in developing it.

“India is starving for power, while Nepal has the second largest hydropower potential in the world. It is a win-win situation for both nations as well as for Indian companies which are finally finding a foothold in Nepal’s power sector,” said Mr Jairam Ramesh, Minister of State for Commerce and Power.

While West Seti Hydro Ltd, a special purpose vehicle, will develop the project, the Manila-based Asian Development Bank (ADB) is among those subscribing to the equity capital for the project. “The ADB’s involvement has been crucial in bringing the many complex project elements together,” a senior PTC official said.

China National Machinery and Equipment Import and Export Corporation (CMEC) is the Chinese contractor that has bagged the PDB (Plan, Design, Build) contract for the project. Besides PTC India Ltd, Infrastructure Leasing & Financial Services of India (IL&FS) has also taken an equity position in the project.

Power would be supplied to India via a 230-km transmission line from the project to the Bareilly distribution centre in Uttar Pradesh.

Funding is expected to be provided by a group of banks, including the Export-Import Bank of China, Industrial and Commercial Bank of China and the Bank of China. In addition, IL&FS has offered to provide debt financing, a source involved in the exercise said.

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