Bangladesh wants to buy 500 MW of electricity from the Upper Karnali and Upper Marsyangdi-II hydro-power projects in Nepal.power divisions officials said.
Bangladesh has evinced interest in buying electricity from the 600 MW Upper Marsyangdi-II hydro-power project, jointly developed by the Nepal Purchase Energy Limited with Indian infrastructure major GMR Group and International Finance Corporation (IFC). The GMR is also scheduled to build the 900 MW Upper Karnali hydro-power project after signing a joint development agreement with the Investment Board of Nepal (IBN), the sources added.
“We had expressed our interest to the GMR to buy around 500 MW of electricity from the IFC-sponsored 1,100 MW hydro power during a meeting in Kathmandu held on 3-7 March. The GMR has accepted our proposal. It is good for us as the cost of electricity would come down,” Power Cell DG Mohammad Hossain told.
Although it will take another decade to implement the mega hydro-power project in Nepal, but Bangladesh listed its name as a club member of such an initiative, considering its limited primary fuel resources which finally open a room to get low-cost electricity.
The project will be implemented in the build-own-operate-transfer (BOOT) model. It aims at an investment of around USD 1 billion and is targeted for commissioning by the financial year 2021.
Hossain said the IFC will provide financial support to Bangladesh so as to enable it to tap the hydro potential of Nepal through India.
“The IFC team sat with the power division officials on Sunday (March 16) in Dhaka to settle some issues related with the project. They asked the power grid company (PGCB) to make preparations to tap the power as the present 420 voltage Bangladesh-India grid line is not ready to tap more electricity (the 500 MW) from Nepal,” a senior official said.
The 600 MW Upper Marsyangdi-II project is located on the Marsyangdi river in the Manang and Lamjung districts of Nepal, some 200 km west from capital Kathmandu, and is already in an advanced stage of development, the power Cell DG said.
“The project is being undertaken through the Himtal Hydropower Company Pvt. Ltd, a Nepalese subsidiary of the GMR Energy Limited. The GMR will market the electricity in India and abroad,” he added.
A project development agreement (PDA) is expected to be signed early next year. IFC will provide 10 percent of the capital and 15 percent of the total cost in loan for development of the project, according to the agreement.
“Apart from investing in the company, IFC will also bring its vast experience in financing similar large and complex infrastructure projects, which will add value to the project. We believe that with continuous supports from the IBN, both the GMR and the IFC shall be able to implement this project in an accelerated manner,” he added.
The Nepalese government has identified the proposed Upper Marsyangdi-II as a national priority projects and it is being facilitated by the Investment Board of Nepal. The survey and investigation work of project. The Nepal government has also cleared majority of the feasibility studies,” Hossain said.