KATHMANDU, Feb 2: The Nepal Investment Board, a government agency set up for implementing mega projects including hydropower projects in fast track mode, has sought more authority for dealing with foreign investors, including the concluding of project development agreements (PDA) with major hydropower developers.
"The secretariat of the Nepal Investment Board (NIB) is submitting a proposal at its board of directors seeking mandate to hold negotiations with power developers," a knowledgeable source told Republica.
The NIB that is overseeing five mega hydropower projects such as Tamakoshi III (650 Megawatts), Upper Karnali (900 MW), Upper Marsyangdi (600 MW), Arun III (900 MW) and West Seti (750 MW) has been developing a template of PDA, a basis for negotiations with the international power developers. "The NIB secretariat is looking for more authority so that the negotiations team can make prompt decisions during talks with the developers," the source revealed.
Radesh Pant, chief executive officer of the NIB secretariat, said that the government would have to form a negotiations team that sits with the developers in order to tailor the PDA to the projects in question. "The negotiations team will be adequately representative," Pant said.
Furthermore, Pant informed that the PDA template will be finalized in the nearest future and the secretariat would facilitate in forming a team to negotiate with the power developers. "The team needs to be well-equipped to have a negotiation with the power developers," Pant added.
According to the source, upcoming meeting of the board of directors of the NIB is roughly scheduled after two weeks. "The secretariat has been working to finalize the template and some of the power developers are pushing to finalize the PDA at the earliest," the source said.
The NIB is currently engaged in negotiations with three foreign power developers including Sutlej Jal Vidyut Nigam, GMR Energy and SN Power. The first two are Indian firms while the third is Norwegian. Sutlej is engaged in Arun III, GMR is developing Upper Marsyangdi and Upper Karnali, and SN Power is working on Upper Tamakoshi. "Sutlej is consistently in contact with NIB to finalize the PDA," the source disclosed.
The NIB is developing the PDA template with technical support from Herbert Smith, an international legal advisor based in London. The NIB board of directors chaired by Prime Minister Baburam Bhattarai In May 2012 had decided to hand over hydropower projects of over 500 MW and nine other infrastructure projects including the Kathmandu-Tarai Fast Track and Upgrading and Management of the Tribhuvan International Airport.