CIAA halts Nepal dam design and construction

Legislative authority to continue dam design and construction on 37.6-MW Kabeli-A, a US$108.6 million run-of-river hydroelectric project in the Panchthar district of eastern Nepal, was stripped by the Commission for the Investigation of Abuse of Authority (CIAA), Nepal’s leading regulatory agency.

Nepal lawmakers on Sunday, Nov. 2, questioned whether CIAA has the authority to issue such an order after the CIAA edict to cease action was announced in August. However, the 2007 Interim Constitution of Nepal empowered CIAA “to investigate and probe cases against the persons holding any public office and their associates who are indulged in the abuse of authority by way of corruption and/or improper conduct,” according to CIAA.

Lok Man Singh Karki, CIAA chief commissioner, via Twitter later in the day Sunday said, “CIAA is not obstructing development but is trying to grease the wheels of development that has been jammed. The prescribed conditions include the Kabeli Hydropower Project. The 37.6 MW project failed to fulfill the PPA (power purchase agreement) and financial closure conditions.”

Kabeli Energy Ltd. (KEL), a subsidiary of Butwal Power Company, is implementing the project. KEL has signed a Project Development Agreement with the Department of Electricity Development for the Kabeli-A development.

According to local news outlets, CIAA made its ruling because many developers contracted to perform work for Kabeli-A have received funds but have not done the required amount of work per agreed-upon timelines.

“Many developers have been holding on to licenses without doing any work. Kabeli did not complete its task as per the agreement, which is why we had to take such a decision,” said CIAA spokesperson Sridhar Sapkota, according to Nepal online daily newspaper e-Kantipur.

All totaled, according to the World Bank, financing for the project includes:

$40 million credit and $6 million grant from the International Development Association – the World Bank Group (WBG) fund for the poorest countries
$19.3 million loan from the International Finance Corporation (IFC) – the WBG private sector arm
$19.3 million loan from the Canada Climate Change Program – for which IFC acts as the implementing agency

A May press release from WBG said Kabeli-A was among the projects shortlisted in the late 1990s on the basis of a screening and ranking exercise. Kabeli Energy Ltd. will invest $23 million towards the $108.6 million cost of the project.

Published reports indicate Nepal routinely suffers frequent blackouts for as many as 18 hours daily.

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Gregory B. Poindexter formerly was an associate editor for

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