KATHMANDU: For the first time in Nepal, a transmission line will be constructed under the Public-Private Partnership (PPP) model.
An agreement was signed on Tuesday between stakeholders for the construction of the Tamor-Dhungesanghu 220 kV Transmission Line, one of the projects under study by the National Transmission Grid Company. The agreement involves the National Transmission Grid Company Limited, Remit Hydro Limited, Simbuwa Remit Hydro Limited, Crystal Power Development Pvt. Ltd., Union Hydropower Limited, and Nepal Hydro Venture Pvt. Ltd.
Project Details
The 32-kilometer-long transmission line will include a 220/132 kV substation and is estimated to cost NPR 3.8 billion. The project will be implemented under the Build, Operate, Own, and Transfer (BOOT) model. Previously, the government solely financed transmission line projects, but this marks the private sector’s first involvement. Five private hydropower companies will make equity investments in the project.
The land required for the project, amounting to 70 ropanis, has already been acquired, and all pre-construction preparations have been completed, according to the National Transmission Grid Company.
Share Structure
Under the proposed structure, 74% of the shares will be held by the electricity-producing companies, while the remaining 26% will be owned by the National Transmission Grid Company.
The share distribution among private sector participants is as follows:
Remit Hydro Limited: 10%
Simbuwa Remit Hydro Limited: 9%
Crystal Power Development Pvt. Ltd.: 42%
Union Hydropower Limited: 8%
Nepal Hydro Venture Pvt. Ltd.: 5%
Revenue Model
The primary source of revenue for the project will be wheeling charges booked by the electricity-producing companies. The earnings will be used to repay loans and cover operational expenses, with any profit or loss shared among the shareholders.
Financial Support
The project will be financed through a loan provided by the Hydroelectricity Investment and Development Company Limited (HIDCL). A memorandum of understanding (MoU) for the loan has already been signed between the National Transmission Grid Company and HIDCL.
This landmark initiative marks a significant step in involving the private sector in Nepal’s energy infrastructure development.