Chinese contracter to build Khimti-2 with its own investment

Kathmandu, Mar. 25: While the Nepali banking sector is facing liquidity crisis for the last couple of years, Peoples Energy Limited (PEL) is developing 48.8 megawatt Khimti-2 Hydroelectricity Project with Chinese investment as per the EPC (Engineering, Procurement and Construction) model without government guarantee.

This would be one of its kind projects as the company would pay only 10 per cent of the total project cost – $ 88 million as an advance, and the rest 90 per cent money would be paid within 700 days after the completion of construction and electricity generation.

Chongqing, China based Chongqing Water Turbine Works (CWTW) will operationalise civil, hydro-mechanical, electromechanical and transmission line development as per the ECP mode.

“PEL and CWTW have already signed the contract for the project. Until now, the foreign companies have been involved in project development only with the government guarantee but due to prestige of the RM Group, major investor in the company, the Chinese contractor has agreed to develop the project on its own,” said Krishna Acharya, Executive Chairman of PEL.

According to him, Khimti-2 is the largest hydropower project in the country being developed by the independent power producers.

“I am hopeful that it would also contribute in addressing the liquidity crisis in the banking sector to some extent,” he said.

Nepali people in the country and abroad, experts of from various sector, locals and organisations of the project area, cooperatives, and other companies have invested in the project.

RM Group is developing 15.4 MW Rudi Khola Hydropower and 20 MW Langtang Khola Hydropower.

The company has concluded the financial closure with the consortium of 10 banks led by Sanima Bank Limited.

Acharya said that the project will earn Rs. 14 million in the first year of its operation and the income will grow by 3 per cent per annum so the income in the ninth year would be 17.4 million.

It will start electricity generation from 14 July 2021.

The project has completed the hydrology study, detailed survey, geological study, physical modelling and drilling works while camping facilities are being constructed.

“Construction of the access road to audit tunnel and dam site is at the final stage, and land has been acquired,” said Acharya. 

Published in The Rising Nepal on 26 March 2018.