Thursday, July 5, 2007

GMR bids for 4 hydel projects in Nepal

GMR bids for 4 hydel projects in Nepal

NEVIN JOHN & RAJESH UNNIKRISHNAN

TIMES NEWS NETWORK[ WEDNESDAY, JULY 04, 2007 03:00:09 AM]

MUMBAI: GMR Infrastructure is looking at opportunities to invest in the hydel power business in Nepal. The company has bid for four projects with an aggregate capacity of 952MW in Nepal and another 1,456MW in India.

The group, which already generates power through conventional hydrocarbons like gas and diesel, has submitted letters of commitment from UTI Bank and Standard Chartered Bank for the Nepal investments.

The plan is to sell the power to India through Power Trading Corporation (PTC). The projects, being evaluated by the Nepalese government, are Upper Karnali (300MW) and Arun III (402MW). The company has also submitted bids for UMS II and III in Upper Marsyangdi, expected to be awarded soon.

Back home, GMR is planning to put in bids for nine hydel projects to generate about 1,456MW in Himachal Pradesh, says GK Raghunandanan, chief finance officer, GMR Power.

Sources said the ministry of water resources in Nepal has decided to award the hydropower projects to GMR, at the recommendation of the evaluation committee.

GMR has offered Nepal 33% free equity in the Upper Karnali, apart from 7.5% free energy. The proposal also includes two-and-a-half years to prepare for the project and four-and-a-half years for construction, including financing with a debt-equity of 75:25. In Arun III, the company will share 15% of the power in the first 15 years of operation and 10% for the remainder of the licence period.

Both the export-oriented projects are to be implemented on a Build Operate Own and Transfer (BOOT) model for a 30-year period that includes construction. After that, ownership will be handed over to Nepal. Besides the free power, Nepal also retains the right to purchase up to 10% of the power generated at the projects.

Source: Economic Times of India

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