Nepal's 456 MW Upper Tamakoshi Hydropower Project started operation on July 5, 2021 from one of its six 76-MW units. Nepal will likely have surplus power for now when all the six units start generating power at full capacity (around mid-October 2021). Even during the dry season (December-February), the project can generate electricity at full capacity for five hours. It is a run-of-the-river hydropower project financed through domestic resources. The project incurred huge time and cost overruns (5 years and NRs50 billion, respectively).
Excerpts from The Kathmandu Post:
Energy Minister Bishnu Paudel, speaking during the inauguration, said the full operation of the project is expected to contribute around 1 percent to the GDP. “It will help boost industrial production,” he said. “This project shows that we can collect the fragmented capital within the country and invest in projects like Upper Tamakoshi.”
The majority share (51 percent) of the Upper Tamakoshi Hydropower Limited is held by four public entities, namely, Nepal Electricity Authority, Nepal Telecom, Citizen Investment Trust and Rastriya Beema Sansthan. “The project has boosted our confidence,” said Prime Minister Oli. “We can now develop these types of projects through our own resources and manpower. We ended the loadshedding in 2017 but that was by importing power.” In May 2018, the Nepal Electricity Authority had officially announced elimination of load-shedding for the industrial sector, a year after relieving residential customers who had suffered never-ending power cuts for decades.
[...]The six years project began in 2011 to end the power shortage. But like other projects of national importance, this too suffered, resulting in massive cost and time overruns. Its price tag has swelled, or more than doubled, to Rs85 billion. Bigyan Prasad Shrestha, chief executive officer of the Upper Tamakoshi Hydropower Project, said that the initial cost of the project was Rs35 billion [without interest]. “Now, the cost of the project [without interest] has reached Rs53 billion. According to him, initially, the interest to be paid was estimated at Rs14 billion. “Now, the bank interest alone stands at Rs32 billion. So, the overall cost is around Rs85 billion.” The annual interest rate has been set at 11 percent.
[..]Nepal, currently, has an installed capacity of 1,385 MW of electricity. According to Timilsina, the country’s peak demand stands at 1,350 MW. This means, when all units of Upper Tamakoshi start production, the country will have nearly 500 MW of surplus energy in the wet season. Around 300 MW of power is currently being imported from India.
[...]“With the average power purchase agreement (PPA) rate of Rs4.06 per unit, it is the cheapest price of electricity for Nepal Electricity Authority,” said Ghising. “So, it is beneficial for the power utility. Even after paying back the loans within a few years, it can generate a good amount of income and more power projects can be developed with it.”
