Upper tamakoshi project to be upgraded

Kathmandu: The company tasked with commissioning the 309-MW Upper Tamakoshi Hydro Electric Project (UTHEP) has decided to upgrade it to a 456-MW project by injecting Rs 3 billion more. Earlier, the estimated cost of the 309-MW project was Rs. 30 billion. Nepali investors have already pledged Rs. 21 billion for the project.

According to Mrigendra Shrestha, project manager, UTHEP, 'This is the cheapest hydropower project in the country.'

He ruled out the possibility of such cheap project in the near future. Generally, it takes Rs. 15 crore to generate one MW.

The working committee of UTHEP recently decided to increase the project capacity by 147-MW. Shrestha said the

committee had decided to increase energy generation capacity after it was revealed that only Rs. 3 billion more would be needed to add relevant infrastructure for the same.

According to him, the upgraded project would generate 2247 Gwh annually, while the same project with the capacity of 309-MW was expected to generate 1,777 Gwh.

The addition of Rs. 3 billion will yield more power than the 69-MW Lower Marshyangdi Hydro Electric Project, which was commissioned at the cost of US$ 360 milllion 20 years ago, said Shrestha.

According to him, four additional turbines should be installed and this will cost US $360 million. On top of it, US$ 30 million will have to be invested for civil engineering works. 'With the modification of the structure, the project could have the facility to channelise the water of the nearby Rolwaling River to generate more energy. This could be a significant feature of the modified structure that could generate additional 145 million units of power daily,' said Shrestha.

With modifications, generation of one KW will cost US$ 1,300. In Nepal, the power generated with the investment of less than US$ 2,000 (Rs. 78,000) per KW is regarded the cheapest.

The investment of the recently-commissioned Mid-Marshyangdi Hydro Electric Project was US$ 5000 (Rs. 390,000) per KW. Shrestha said they were planning to issue power bonds and explore other alternatives to meet the increasing cost. Employees' Provident Fund (EPF) has pledged an additional loan of Rs. 10 billion for the project, while it has already invested Rs 12 billion.

Two years ago, Nepal Electricity Authority (NEA) had issued power bonds worth Rs. 1.5 billion to meet the shortfall of funds for commissioning of Mid-Marysangdi project and for Kulekhani-3 project.

NEA will hold consultations with the Ministry of Water Resources and Ministry of Finance on the possibility of issuing power bonds.

According to Shrestha, his company will hold a meeting on Wednesday to identify investment alternatives for the upgraded project, the most ambitious project undertaken by Nepali stakeholders.