India firm to build Nepal’s 300-MW Upper Karnali

The government of Nepal has awarded a contract to a consortium led by India’s GMR Group to build the 300-MW Upper Karnali hydroelectric project on Nepal’s Karnali River.

GMR Infrastructure Ltd. announced Jan. 31 that GMR Infrastructure, its GMR Energy unit, and consortium partner Italian-Thai Development Project Co. of Thailand signed a memorandum of understanding Jan. 24 with the government of Nepal. The build-own-operate-transfer award was made as the result of Nepal’s first international competitive bidding process to award a large hydro project. (HNN 2/19/07)

The winning consortium agreed to provide 12 percent of the project’s power free of charge to the government of Nepal and to give Nepal Electricity Authority a free 27 percent equity in the special purpose company formed to develop Upper Karnali. Most power generated by the project is to be exported to India’s northern transmission grid.

Nepal announced bidding in December 2006 for Upper Karnali and the 402-MW Arun 3 and 600-MW Budhi Gandaki (or Burhi Gandaki) hydroelectric projects. GMR said an evaluation committee awarded it top ranking for both Upper Karnali and Arun 3. However, GMR said, the government decided to allocate only one project per developer, resulting in the Upper Karnali award to the GMR-led group.

GMR Energy also is developing the 250-MW Upper Marsyangdi 2 hydroelectric project on Nepal’s Marsyangdi River through Nepal’s Himtal Hydro Power Co. (P) Ltd. In November 2007, GMR entered a share purchase and joint venture agreement to acquire 80 percent of Himtal. (HNN 11/29/07)

In India, GMR is developing the 160-MW Talong hydroelectric project on Kameng River in Arunachal Pradesh (HNN 1/30/07), the 180-MW Bijoli Holi project in the Ravi River Basin of Himachal Pradesh State (HNN 8/3/07), and the 140-MW Alaknanda hydro project on the Alaknanda River in Uttarakhand State.

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