opportunities for investment in hydro power

8/7/2019 Opportunities for Investment in Hydro Power

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Anup Kumar Upadhyay

Joint Secretary,

Ministry of Water Resources

Opportunitiesin

Hydropower Investmentin Nepal

NRNs for Socio-Economic Transformation of Nepal- InvestmentOpportunities in Infrastruvture,16th Oct,2007 ,Kathmandu.

To generate electricity at low cost byutilizing the water resources available inthe country.

Tie up electrification with the economic

activities

To develop hydro power as an exportable

commodity.

Objectives:


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2017:

2100 MW for Domestic consumption.

50 % Electrification from National Power Grid,

12 % Small Hydro,

3 % Alternative Energy Resources.

Target:

2027:

4000 MW for Domestic consumption.

75% electrification from National Power Grid,

20 % Small Hydro,

5% Alternative Energy Resources.

Target:


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Policy:

Implementation of hydropower based on theconcept of Build, Operate, Own andTransfer (BOOT) shall be encouraged.

In view of the concept of bilateral and regional

cooperation and taking into consideration theabundant hydropower generation capacity inthe country, Export of Electricity shall beencouraged.

Policy:

Environmental Provision: Environmentalimpact; Land acquisition, rehabilitation, etc.

Water right: Legal provisions shall be made toprevent adverse effects on the availability of

water or Water right of the projects forwhich license is not required or beingoperated after obtaining the license.


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Provision for Investment:

In cases where irrigation benefits may alsobe availed form any storage project, GONmay be a joint venture partner with the privatesector in such project.

Provision relating to Visa:

Non-tourist visa and Work Permit shall beprovided to the investor of hydropowerproject, his/ her authorized representative andnecessary foreign experts, skilled manpowerand their families as provided for in theagreement until the construction andoperation of the project.


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Management of investment risk: Hydropower projects, transmission system anddistribution system established by the private sectorshall not be nationalized during the term of thelicense

Exchange facility shall be provided to the foreignperson, firm or company making investment for thepower project to be constructed by the private sectorto repatriatethe amount form Nepal in foreigncurrency at prevailing exchange rate:

a) Amount necessary for repayment of the principal

and interest of the approved loan borrowed in foreigncurrency for the hydropower project.

Management of investment risk:

b) If the electricity has been sold within thecountry, the amount earned as profit or dividendin lieu of the foreign investment,

c) In the case of an export- oriented power

project, all of the payment of principal and theinterest on the loan, profit and dividend may berepatriated in the currency in which the incomehas been received in the Nepal by selling theelectricity.


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Management of investment risk:d) The amount received from the sale of the

share of foreign investment as a whole or partthereof may be repatriated in the samecurrency in which the share has been sold.Provided, however, that if the share has beensold in Nepalese currency, foreign currency

exchange facility shall be available only for75% thereof.

Provision on internal electricity market:

Provision on internal electricity market:

For the private sector operated hydropowerprojects with capacity up to one MW and notlinked to the Grid, the IPP may sell anddistribute the electricity by determining thetariff rate of the electricity on its own.


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Legal Provisions

Hydropower Development Policy 2001,1992

Electricity Act - 1992 (Regulations - 1993) Water Resources Act - 1992 (Regulations-1993) Environment Protection Act - 1997 (Regulation-1997) Industrial Policy - 1992 Industrial Enterprises Act - 1992 Foreign Investment & One-Window Policy-1992 Foreign Investment and Technology Transfer Act

1992

Department of Electricity Development

Department of Electricity Development (DOED) hasbeen established as One Window for :

Issuance of licenses

Providing concessions & incentives

Assistance in importing goods, obtaining land,

obtaining permits, approvals etc.


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APPLICATION PROCEDURES FORPOWER PROJECT DEVELOPMENT

IN

NEPAL

Application process

Hydropower project with Installed Capacityfrom 100 kW 1000 kW

Hydropower project with Installed Capacitymore than 1000 kW


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Application Process for Hydropower Projects

with Installed Capacity from 100 kW up to 1000kW

No license required

Need to submit information related to the projectto MOWR through DOED

Submit desk study report,[ topographicmap,area of distribution, number of beneficiary,information of other water use, boundaries of

survey area, recommendation fromVDC/Municipality/;work schedule;LOI for PPA,Financial evidence.]

Steps to be taken by the proponent after

obtaining an approval letter from the DOED:

If the approval letter from the DOED is for surveyonly- submit six monthly progress reportandFeasibility Study Report.

If the approval letter from DOED is forGeneration, Transmission and Distribution, theproponent: Completes survey, submits Feasibility Study to DOED

and starts construction Submits 6- monthly progress reportsuntil construction

complete.


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Application Process for

Generation Survey License

License Application Process for HydropowerProjects more than 1000 kW

A. Survey License (to study Generation,transmission, distribution survey of project)

B. Operation License

a. Production License(for construction andoperation of a production facility).

b. Transmission License(for construction andoperation of a transmission)

C. Distribution License(for construction andoperation of a distribution facility)


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Supporting documents required toobtain Generation Survey License

Topographical map showing all the majorcomponents of the project (1:25000 or 1:50000);Desk study report as per Guidelines for Study of HPProjects, 2003.

Survey area in longitude and latitude includingrelated VDC / Municipalities.

Estimated cost of project; Work schedule; Financialevidence to support survey activities ; Company-Certificate of registration, Memorandum of

Association, Memorandum of Articles, PermanentAccount Number (PAN);Individual - Citizenshipcertificate.

Supporting documents required toobtain Generation Survey License

Detail of other water uses in the requestedsurvey area like water supply, irrigation, watermill, etc or details of licenses issued by DWRCregarding such uses

Details of in-house technical capability ofapplicant to conduct survey or details oftechnical capability of consultant in caseconsultants to be hired


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Application Procedure for Surveylicense

Proponent submits application package toDOED

If the area overlap with other project-DOEDreject the proposal and inform in writing-if notand document is complete DOED forwards thedocument with a license format to MOWR, ( ifdocument incomplete DOED asks Proponent tosubmit required document with in 35 days and) -MOWR issues the license to the proponent

through DOED.

Supporting documents required toobtain license Cont...

a. Feasibility Study Report including: Detaileddescription of the project; Description of relatedtransmission line to evacuate power; ApprovedIEE/EIA Report from concerned Ministry

b. Names of partners in the project and type oftheir association, full name and address of the

person or corporate body and its directors withwhom the ownership of the project shall bevested at last.


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Supporting documents required to

obtain license Cont....

c. Detail Financing Plan( Estimated cost of theproject;Financial capability of the investors of theproject; Commitment of the financial institutionsto be involved directly in the project; Percentageof liability of investor; Equity and debt ratio.)

Supporting documents required toobtain license Cont...

d. Power Purchase Agreement (PPA)

e. Other requirements: Certificate of registration,Memorandum of article, Memorandum ofAssociation, Industrial Registration Certificate,PAN ( Permanent Account Number),Details ofin-house technical capability of applicant to

implement construction works or the technicalcapability of contractor/construction company incase contractor/construction company is to behired for construction works.


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Application Procedure for Generation,Transmission and Distribution license

Proponent submits application package toDOED-DOED reviews document- if documentadequate and complete-a public notice, statingthe particulars published (for 35 days) invitingcomments from the public-upon consideration ofpublic reactions, the condition that should befollowed by the applicant shall be mentioned inthe license format- DOED review document andforwards the document with a license format to

MOWR, - MOWR issues the license to theproponent through DOED with in 120 days.

Steps to be taken by the proponentafter obtaining License

Starts construction work within 1 year

Completes financial closure within 1 year oflicense issued date

Submits bi-annual progress report untilconstruction is completed

Testing and Commissioning Starts commercial operation

Pay Royalty


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His Majesty's Government shall levy a royalty on a corporate body Licensed togenerate more than 1 MW capacity of hydro-electricity on the basis of theinstalled capacity and the energy produced.

ROYALTY

(a) Internal consumption project:

Up to 15 years After 15 years*Electricity Capacity Annual capacity

Royalty, per kWEnergy

Royalty,per kWh

Annual capacityRoyalty, per kW

EnergyRoyalty, per

kW h

1 Up to 1 MW - - - -

2 From 1 MW to 10 MW Rs. 100/- 1.75% Rs. 1000/- 10%

3 From 10 MW to 100 MW Rs. 150/- 1.85% Rs. 1200/- 10%

4 Above 100 MW Rs 200/- 2.00% Rs. 1500/- 10%

5 For captive use Rs. 1500/- - Rs. 3000/- -

(b) Ex po r t -o r iented hy dro po wer pro jec t:

Up to 15 years After 15 years*

Type Annual capaci tyroyal ty, per kW

Energyroyal ty, per

kW h

Annual capaci tyroyal ty, per kW

Energyroyal ty, per

kW h1. Export-oriented run-of-

the-river projectRs. 400/- 7.5% Rs. 1800/- 12%

2. Export-oriented storageproject

Rs. 500/- 10% Rs. 2000/- 15%

* After 15 years from the date of comm ercial operation.

Special Provision:Exemption on energy royalty for the first fifteenyears of the commercial production for the rural

electrification.


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NEA Policy On Power Purchasesfrom Small Projects

Project Size Total Capacity to beaccepted

100 Kw to 5 MW No Limit

NEA has fixed the buy-back rate for small projects:

NRs. 4.25 per kWh (Paush,Magh,Falgun,Chaitra)

NRs. 3.00 per kWh

Base year 2055/56, 6% escalation, up to 2060/61.

Transmission line Connectionswith India 33 KV 14 No

132KV 2 No

400KV 3 No*

*Proposed:

Butwal- Anandnagar,Duhabi- Purnia,

Dhalkebar- Muzaffarpur


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Survey License Fee

1-5 Mega Watt -50,000 NRs/Year.

5-100 MW -10,000 NRs/MW/Year

100-500 MW -1,000,000 NRs/Year

> 500 MW -2,000,000 NRs/year

Construction License Fee

1-5 M W -100,000 NRs

5-100 MW -500,000 NRs

100-500 MW -1,000,000 NRs

500-1000 MW -2,500,000 NRs

>500 MW -5,000,000 NRs


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Projects Inventory

Master Plan Studies

MHSP

NEA

DOED

Identified by Promoters

Survey License Issued

1-5 M W -91

5-20 MW -28

21-100 MW -16>100 MW -13

-------------------------------------

Total 148 No.

Construction License -21 No. Source: DOED, May 2007


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Rahughat Khola

LocationType

Installed Capacity

Gross Head

Design Discharge

Weir Height

Power House Type

Desander Type

Tunnel Length & Dia.

Average Annual Energy

Firm Energy

Access Road Length

Transmission LengthProject Cost

Status: Reconnaissance Study 1996

Feasibility Study 1998

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Western RegionRun-of-River

27 MW

249 m

13 m3/s

10 m

Surface

Surface

5.8 km & 3.5 m

164.6 GWh

119.6 GWh

10 km

22 km (132 kv)US$ 56.1 million (1998)

Kabeli ALocation

Type

Installed Capacity

Gross Head

Design Discharge

Weir Height

Power House Type

Desander Type



Firm EnergyAccess Road Length

Transmission Length

Project Cost

Eastern Region

Run-of-River

30 MW

110.2 m

34 m3/s

13 m

Surface

Surface

4.43 km & 4.2 m

164 GWh

118 GWh12 km

77 km (132 kv)

US$ 65.3 million (1998)

Status: Reconnaissance Study 1996

Feasibility Study 1998

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Upper Karnali

Location :Type :Installed Capacity :

Gross Head :

Design Discharge :

Weir Height

Power House Type :

Desander Type :

Tunnel Length & Dia. :

Average Annual Energy :

Firm Energy :

Access Road Length :

Transmission Length :

Project Cost :

Mid/Far Western RegionRun-of-River (Pondage)300 MW

141 m

236 m3/s

27 m

Underground

Surface

2.2 km & 11.35 m

1915 GWh

1159 GWh

22 km

215 km (220 kv)

US$ 454.3 million (1998)

Status: Feasibility Study 1998

ChameliyaFar-Western Development

Darchula

Pondage Run-of-River30 MW ( 3x10 MW )

104 m

35.5 m3/s23 m

Surface

Surface4.075 km

4.3 m* 4.3 m

196.83 GWh18.0 km

127 km (132 Kv)

US$ 77.55 million (1998)

LocationRegion :

District :

Type :Installed Capacity :

Gross Head :

Design Discharge :Dam Height :

Desander Type :

Power House Type :

Tunnel Length :

Tunnel Cross SectionAverage Annual Energy :



Project Cost :`

Status: Feasibility & EIA Study Completed

Detail Design on Going


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Budhi Ganga

Far-Western Development

AchhamPondage Run-of-River

20 MW ( 2 x 10 )

90 m

27.63m3/s

25 m

Surface

Surface

5.6 km / (3.9-5.1)m

106.28 GWh

36.139 GWh

44.58 GWh

2.76 km88.6 km (132 kv)

US$ 50.64 million (1995)

Location

Region :District :

Type :

Installed Capacity :

Gross Head :Design Discharge :

Weir Height :

Power House Type :Desander Type :

Tunnel Length & Dia :


On peak Firm Energy :

Off peak Firm Energy :



Project Cost :

Status: Feasibility & EIA Study,1998

)

Kabeli-ALocation

Region :

District :


Gross Head :


Power House Type :

Desander Type :


Average Annual Energy :On peak Firm Energy :

Off peak Firm Energy :



Project Cost :Status: Feasibility Study and EIA, 1998

Eastern Development

Panchthar and Taplejung

Pondage Run-of-river

30 MW ( 3x10 MW)

110.2 m

34 m3/s

12.6 m

Surface

Surface

4.43 Km/(4.2-5.0)m

164 GWh

54 GWh64 GWh

12.58 km

77 km (132 kv)

US$ 65.3 million (1998)


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Likhu-4

Central/Eastern Development

Ramechhap and Okhaldunga

Pondage Run-of-River

51 MW ( 3x17 MW )

240 m

25.5 m3/s

43 m

Surface

Surface

4.5 km /(3.6-4.37)m

275 GWh

36 km

22 km (132 kv)

US$ 75.5 million (1998)

LocationRegion :

District :

Type :


Gross Head :

Design Discharge :

Dam Height :

Power House Type :

Desander Type :

Tunnel Length &Dia :


Access Road Length :Transmission Length :

Project Cost :

Status: Feasibility and EIA Study,1998

Tamur-Mewa

Eastern Development

Taplejung

Run-of-River

83 MW

110.7 m

85 m3/s

5.0 m

Underground

Surface

4.74 km/(5.4-7.2)m

484 GWh

98.5 GWh

89.7 GWh14 km

132 km (132 kv)

double circuit

US$ 158.3 million (1998)

Location

Region :

District :

Type :


Net Rated Head :

Design Discharge :

Weir Height :

Power House Type :

Desander Type :


Avg. Annual Energy :

On Peak Firm Energy :

Off Peak Firm Energy :Access Road Length :


Project Cost :

(including transmission)

Status: Feasibility & EIA Study, 1998

Tamur MewaEastern Development

Taplejung

Run-of-River

18 MW

132 m

15.4 m3/s

5.0 m

Surface

Surface

4.2 km/(2.75-3.6)m

117 GWh

23.5 GWh

70.1 GWh4.8 km

8 km (132 kv)

single circuit

US$ 33.7 million (1998)


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a

Rahughat

Western Development

Myagdi


27 MW (3 x 9 MW)

249 m

13.0 m3/s

25 m

Surface

Surface

5.81 km (2.65-3.5)m164.6 GWh

58 GWh

61.6 GWh

10 km22 km (132 kv)

US$ 59.3 million (1998)

Location

Region :District :


Gross Head :

Design Discharge :Dam Height

Power House Type :

Desander Type :



On-peak Firm Energy :

Off-peak Firm Energy :Access Road Length :


Project Cost :

Status: Feasibility and EIA Study, 1998

Andhi Khola

LocationRegion

District

Type

Installed Capacity

Dam Height

Power House Type



Access Road Length

Transmission Length

Project Cost

Central/Western Region

Shyanga

Storage

176 MW (4 x 44)

162 m

Surface

3.28 km & 6.3 m

663 GWh

10.5 km

10 km (132 kv)

US$ 463.4 million(1997)

Status: Feasibility and EIA study on going

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Arun III

Eastern DevelopmentSankhuwasabha

Pondage Run-of-River402 MW ( 6 x 67 MW )

303.8 m

320 m3/sec68 m

Underground

Underground

11.5 km/7.5 m

2891 GWh

1558 Gwh

116.8 km432.2 km(220 kv double crt.)

US$ 859.09 million (1995)

Location

Region :District :

Type :


Gross Head :

Design Discharge :

Dam Height :

Power House Type :

Desander Type :



Firm Energy :


Project Cost :

Status: Detailed Design Study, 1991

Dudh KoshiLocation

Region :District :

Type :


Net Rated Head :

Design Discharge :

Dam Height :

Live Storage :Tunnel Length& Dia :

Power House Type :

Average Annual Energy :On Peak Firm Energy :

Off Peak Firm Energy :Access Road Length :


Project Cost :

Eastern DevelopmentOkhaldunga, Khotang

Storage

300 MW (5x60 MW)

249.3 m

136 m3/s

180 m

442.1 million cubic metre

13.26 km & (7.3 -9.0) m

Underground1806 GWh

552 GWh

920 GWh43.2 km

93 km (220kv Duble crt.)

135 km (220 kv Single crt.)US$ 690.1 million (1998)

`Status: Feasibility Study, 1998


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Upper Arun

Location

Region :

District :

Type :


Net rated Head :

Dam Height :

Design Discharge :

Power House Type :

Tunnel Length & Size :Average Annual Energy :

Access Road Length :Transmission Length :Project Cost :

Eastern Development

Sankhuwasabha

Run-of-River (Daily Pondage)

335 MW ( 4 x 83.75 )

492 m

37 m

78 m3/Sec

Underground

7.84 km & 5.5 m2050 GWh

45 km from Arun-3 damsite200 km (220 kv)US$ 508.8 million (1991)

Status: Feasibility Study, 1991

KankaiLocation

Region

District

Type

Installed CapacityMaximum Head

Rated Head

Design DischargeTunnel Length & Dia.


Access Road LengthTransmission Length

Project Cost

Eastern Development

Ilam, Jhapa

Storage

60 MW

79 m

59 m

121m3/s

0.43 km/4.5 m

200 GWh

3.8 km

15 km

US$ 285 million (1984)

Status: Feasibility Study, 1978

Updated by Edf(France) in 1984

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Central Development

Ramechhap and Dolkha


27.2 MW

275 m

11.1 m3/s

14 m

3.9 km

12.0 m2

155 GWh

1.4 km16 km (132 kv)

US$ 93 million

(to be confirmed)

Location

Region :

District :

Type :


Rated Head :Design Discharge :

Dam Height :

Tunnel Length :Tunnel Cross Section :



Project Cost (Nov. 1999) :

Status: Pre-Feasibility Study, 1997

Khimti-II

Lower Arun

Eastern Development

Sankhuwasabha

Run-of-River (Daily Pondage)

308 MW ( 4x77 MW )

212.2 m

171.5 m3/Sec

10.5 m

Underground

15.2 km / 8.4m

2275.9 GWh1436.5 GWh

25 km from Arun-3 damsite

100 km (220 kv)

US$ 481.4 million (1990)

Location

Region :

District :

Type :


Net Rated Head :

Design discharge :

Weir Height :

Power House Type :

Power Tunnel Length & Dia :

Average Annual Energy :Firm Energy :



Project Cost :



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Kali Gandaki-2

Western Region

Nawalparsi and Tanahu

Storage

660 MW (6 x 110 MW)

128.3 m

585 m3/Sec

177 m

Surface

322 m /6 m3470 GWh

20 km40 km (220 kv)US$ 772 million (1985)

LocationRegion :

District :

Type :


Net Rated Head :

Design Discharge :

Dam Height :

Power House Type :




Project Cost :


Budhi Gandaki

Central/Western Development

Dhadhing/Gorkha

Storage600 MW ( 4 x150 MW )

185 m

430 m3/s225 m

2755 million cubic meter

Rockfill with inclined core

Underground

276 m /12m2495 GWh

2.5 km

65 km (220 kv)


LocationRegion :

District :


Net Head :


Live storage :

Dam Type :

Power House Type :

Tunnel Length & Dia :Average Annual Energy :



Project Cost :



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Upper Trisuli -2

Central DevelopmentRasuwa

Run-Of-River300 MW

298 m

119.7 m3/Sec13 m

Underground

Underground

8.2 km /8.6m

1747 Gwh

1391 Gwh

10 km50 Km (132kv)


Location

Region :District :


Gross Head :

Design Discharge :Dam/weir Height

Power House Type :

Desander Type :



Firm Energy :


Project Cost :

Status: Reconnaissance, 1996

Mai Loop

Eastern DevelpomentIlam

Storage

60 MW

104 m

68.8 m3/s

125 m

Surface

0.6 km/6.4 m

255 Gwh

110 Gwh13 km

35 km (132 kv)


Location

Region :

District :

Type :


Gross Head :

Design Discharge :

Dam/Weir Height

Power House Type :



Firm Energy :Access Road Length :

Transmission Length :Project Cost :



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Tama Koshi-2

Central Development

Dolkha

Run-Of-River (Regulated)

207 MW

141 m

174.6 m3/S

Underground

9.5 km/9.6 m

938 Gwh450 Gwh

1 km85 km(132kv)US$ 169 million (1996)

Location

Region :

District :

Type :


Gross Head :

Design Discharge :

Power House Type :



Access Road Length :Transmission Length :Project Cost :


Upper Marsyangdi-3

Western Development

Lamjung

ROR121 MW

244 m

59 m3/Sec6 m

Underground

Underground

6.2 km/6.3 m

692.6 Gwh549.4 Gwh

26 km

57 km


LocationRegion :

District :


Gross Head :

Design Discharge :Dam/Weir Height :

Power House Type :

Desander Type :





Project Cost :

Status: Reconnaissance 1996


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Tila River -2

Mid WesternKalikot

ROR203 MW

500 m

48.3 m3/s14 m

Underground

Underground

6.6 km/6 m

950 Gwh

536 Gwh

75 km100 km (220 kv)


Location

Region :District :


Gross Head :

Design Discharge :Dam/Weir Height

Power House Type :

Desander Type :



Firm Energy :


Project Cost :

Status: Desk Study, 1996

Naumare

Mid Western Development

Argakhachi/ Pyuthan

Storage

245 MW (3*81.7 MW)

154.5 m

185.6 m3/s

190 m

Rockfill

580 million cubic metre

0.125 km/7 m932 Gwh

604 Gwh

18 km

US$ 419.9 million (1990)

Location

Region :

District :

Type :


Net Head :

Design Discharge :

Dam/Weir Height

Dam :

Live Storage :

Tunnel Length & Dia :Average Annual Energy :

Firm Energy :


Project Cost :

Status: Pre-feasibility Study, 1990


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Tama Koshi-3

Location

Region

District

Type

Installed Capacity

Gross Head

Design Discharge

Dam Height

Power House Type

Tunnel Length & Dia.Average Annual Energy

Firm EnergyAccess Road LengthTransmission Length

Project Cost

Central Development

Dolkha

Storage

309 MW

208 m

164.3 m3/s

120 m

Underground

9.4 km & 9.6 m1324 GWh

631 GWh6 km95 km (220 kv)

US$ 414million (1996)

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T h a n k Y o u

opportunities for investment in hydro power

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