Investment Board Nepal (IBN) has prepared a modality for the construction of the stalled Tamakoshi 3 Hydropower Project which has been in limbo since potential developer Statkraft of Norway pulled out in January 2016. 

IBN is planning to develop the hydropower project under the public private partnership (PPP) model with a mix of domestic and international investments. The contract for the project will be awarded through international competitive bidding. 

Domestic investors and locals affected by the project will have a 25 percent stake in the scheme. IBN has submitted the plan to the Energy Ministry for its examination before calling for bids. “We are yet to hear from the ministry,” said a highly placed IBN source. 

The board wants to consult with the ministry as Energy Minister Janardan Sharma is keen on involving his ministry in the project. 

“When we presented the modality for the development of Tamakoshi 3 for approval at IBN’s 25th board meeting, Energy Minister Sharma asked that his ministry be involved in it,” said the source. “Therefore, IBN sent the proposal to the ministry for its feedback.” 

IBN CEO Maha Prasad Adhikari refused to comment on the subject other than saying that the board was holding talks with various stakeholders before taking the project forward. He told the Post that IBN would go for international bidding in the next fiscal year.  Around half a dozen foreign companies have shown interest in building the project after the Norwegian company quit. IBN has asked them to wait until preparations are completed and global bids are called.

Statkraft had signed a project negotiation agreement with IBN, but left just before talks were to be held to sign a project development agreement (PDA). 

The Norwegian company spent Rs1 billion to conduct a survey, technical updates and environment impact assessment after receiving a survey licence from the government in March 2007. 

Officials said it abandoned the project over concerns about finding buyers for the electricity produced by the project.

Statkraft had planned on selling energy to India as a power trade agreement (PTA) had been signed with the southern neighbour. But it lost hope after India imposed a trade blockade and relations between the two countries soured.

Tamakoshi 3 is a run-of-the-river project located in Dolakha and Ramechhap districts east of Kathmandu.