Kathmandu, July 4 (IANS): Energy-hungry Nepal has cleared the decks for Indian investment in the 44 MW Super Madi Hydropower Project in Kaski district in the country's western region.
The Industrial Promotion Board (IPB), at a meeting chaired by Industry and Finance Minister Shanker Prasad Koirala, decided to allow Coastal Projects Limited India to invest in the project.
The project, being developed by Himal Hydro and General Construction Limited, had sought the government's permission to bring foreign investment for the project, according to a statement released after the meeting.
Super Madi, which holds a construction licence for electricity generation, is seeking to bring foreign investment from its Coastal Project Limited India.
According to information posted on Himal Hydro's website, Coastal Projects India has a majority share holding (82.21 percent) in Nepal Jalabidyut Prabardhan Tatha Bikas Ltd, which in turn has 78 percent stake in Himal Hydro.
According to the website, it will take four years to complete the project.
The industry ministry, in its press statement, said the total capital of the project is IRs.4 billion (NRs.6.40 billion).
"It was a welcome step to harness investment in Nepal. We need to create more investment-friendly environment to invite such Indian investment in various economic and infrastructure-related projects," Chirinjivi Nepal, chief economic adviser to Koirala, told IANS.
He expressed the confidence that more foreign direct investment will pour into Nepal once elections are held, pointing out that it is difficult to harness such investment without political stability.
Various Indian investors and companies are in the fray and are in talks with the government of Nepal to boost its hydro-potential. To this end, at present, two Indian companies, GMR and Sutlej, are in talks with the government of Nepal to sign Power Development Agreements (PDAs) to develop the 900 MW Upper Karnali Hydro Electric project and Arun-III -- the most promising projects in Nepal which were awarded to Indian companies through the first ever International Competitive Bidding process.
Besides these two, 30 other Indian companies have obtained survey licence issued by the government to Indian companies/joint ventures.
Nepal has the hydropower potential to transform it from one of the poorest countries in the world to one of the most developed, but it has not been able to tap its resources due to lack of funds, the insurgency and political instability.
While India is the most practical partner for developing and selling power, Nepal has so far been unable to develop any relationship due to unnecessary politicisation of the energy sector in Nepal.