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NEA Starts Negotiations for PPA for Upper Trishuli-1

Nepal Electricity Authority (NEA) is starting negotiations with Nepal Water and Energy Development Company (NWEDC) for a power purchase agreement, PPA for Hydroelectricity Project of Upper Trishuli-1 .

PPA for Hydroelectricity Project
Photo credit: Nepal Energy Forum

NEA (Nepal Electricity Authority)  has authorized a committee headed by Power Trading Department Chief, Prabal Adhikari to hold talks with NWEDC (Nepal Water & Energy Development Company).

Adhikari said, “Our committee will be complete within a couple of days with the addition of a few experts, and then we will start negotiations immediately. However, informal talks have already begun.”

After the government issued new guidelines on PPA (Power Plant Agreement), this will be the first PPA negotiations to be conducted. These new guidelines allow the NEA to sign the PPA in convertible currency terms for the amount of foreign debt for 10 years or until the foreign loan is repaid.

The PPA guidelines also have fixed rates for different types of projects so NEA does not have to negotiate the power purchase rate with the project developer. The Upper Trishuli-1 is a run-of-the-river type, and for this type of project, the rate has been fixed at Rs. 8.40 per unit during the dry season that lasts from December to May. During the wet season that lasts from June to November, the rate is Rs. 4.80 per unit.

NWEDC is a joint venture company formed by Korea South East Power Company, Daelim Industrial Corporation and Kyeryong Construction Industrial Corporation along with International Finance Corporation (IFC) and investor Bikesh Pradhanang.

After its completion, the Upper Trishuli-1 will generate 216 MW of energy. It is expected to generate 1,456.4 gigawatt hours of net electricity per year.

Edited by – Sushil Awale

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