Asian bank funds oversight of Nepal’s 750-MW West Seti

The Asian Development Bank (ADB) has approved US$300,000 to Nepal’s Ministry of Finance for technical assistance in preparing to administer the 750-MW West Seti hydroelectric project to be built on the Seti River in Nepal’s Far Western Development Region.

The ministry plans to seek consultants to help prepare a framework for managing revenues generated from export of project power to India, to comply with accountability standards and to ensure proceeds are used for poverty reduction programs. (HNN 10/24/07)

The US$1.2 billion project is being developed by West Seti Hydro Ltd., a subsidiary of Australia’s Snowy Mountains Engineering Corp., which received a concession to develop the project in 1994. In August, an environmental assessment of the project found it would bring US$991 million in economic benefits to Nepal over 30 years and would mitigate adverse effects on ecosystems and residents.

ADB said the best approach to implement West Seti is by public-private partnership including financial participation by the government. The bank said it would provide funding from its public sector window for government equity participation in the project. It also is preparing a combination of equity, loan, and guarantee for West Seti.

Technical assistance consultants are to be hired to conduct assessments, identify and design fiscal governance measures, carry our economic and financial due diligence, and prepare a local area development program. International consultants are to be engaged for 10 person-months, while national consultants would be engaged for four person-months.

Construction of West Seti is expected to begin by late 2007. It is expected to require 5.5 years to build, 400 kilometers west of Kathmandu.

The ADB project officer for the technical assistance program is Neside T. Anvaripour, Energy Division, SARD, Asian Development Bank, P.O. Box 789, 0980 Manila, Philippines; (63) 2-6326468; E-mail: ntasanvaripour@adb.org; Internet: www.adb.org.

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