KATHMANDU, Nov 8: In what may be termed a breakthrough in trans-border cooperation between Nepal and India, the stakeholders of the Dhalkebar-Muzaffarpur (D-M), 140 km, 400 KV double circuit, cross-border transmission line project put a deadline of May 2010 for completion of Power Purchase Agreement (PPA) and financial closure of the project. The project will be completed within 18-24 months time after that.
The stakeholders agreed on an "Action Plan" to realize the project in the shortest timeframe Sunday at the Stakeholders´ Meeting on Cross Border Transmission Project organized by the Nepal Electricity Authority (NEA).
Dhalkebar-Muzaffarpur PPA by Feb 2010
Financial closure by May 2010
World Bank funding for substation at Dhalkebar, Butwal-Dhalkebar-Duhabi line and infrastructure
Two JV to enter into ITSA with NEA
To appoint a company for final preparation
Next stakeholders´ meeting on Jan 18 in New Delhi
"The strong commitments expressed here will be a milestone in expediting the energy development as the construction of the transmission line is a prerequisite for power trade," Dr Prakash Sharan Mahat said at the function.
It was also agreed that the construction of the sections of the Butwal-Dhalkebar-Duhabi 465 km transmission system will be made part of the overall project. The Hetauda-Bharatpur (70 Km) section is already under implementation with World Bank (WB) financing; and for Bharatpur-Bardaghat (70 Km) WB financing has been secured.
The Memorandum of Understanding (among NEA, PTC, IL&FS and PGCIL) said, NEA, in close collaboration with the government, PGCIL (Power Grid Corporation of India Limited) and the WB team "will finalize the designs of the additional lines" at the earliest.
As per the MoU, the legal framework for the project consists an Implementation-cum-Transmission Service Agreement (ITSA) to be entered by each of the two existing joint venture (JV) companies with NEA.
The government also informed that it has received "positive response" from the WB for funding substation at Dhalkebar, Butwal-Dhalkebar-Duhabi line and other associated infrastructure.
IL&FS, the Indian infrastructure developer, also confirmed that India´s Sutlej Jal Vidyut Nigam Limited (SJVNL), which is developing Arun III, would subscribe to the equity on the Indian JV, in addition to IL&FS and PGCIL and NEA.
The stakeholders decided to appoint a company to speed up the project implementation, including complying with the fiduciary (procurement, disbursement, financial management) as well as safeguards (environmental and social assessments and management plans etc) policies and guidelines of the WB.
"They will play a facilitative role for a wider integration in the region," Raghu Vir Sharma, the team leader of WB, said, adding, "This is, however, contingent upon the projects meeting the WB guidelines."
The next stakeholders´ meeting will be held in New Delhi on January 18 next year.
NEA to import 150 MW from India for 25 years
NEA also confirmed that it now needs to import 150 MW of power from India through PTC on a long term (25 years) basis. Accordingly, it was agreed that the PPA would be agreed between NEA and PTC India.
The D-M project is being developed to facilitate trade between Nepal and India. Initially, power will be imported from India to meet the deficits in Nepal, and when the larger hydro-power projects are completed, the line will facilitate exports from Nepal. Accordingly, Nepal committed to resolving any "outstanding legal issues" for Nepali companies to be able to trade substantial amounts of electricity with India.
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