GMR Group on Monday announced finalisation and execution of the project development agreement (PDA), with the Nepal government, for the 900 MW Upper Karnali Hydro Power Project.
Located on the Karnali river, in Surkhet, Dailekh and Achham districts of Nepal, the export oriented project is expected to take about five years to be constructed. It was awarded to the Group through an international competitive bidding process in 2008 on BOOT basis.
Informing the stock exchanges about the agreement signed on September 19, GMR Group said the project is expected to generate about 3,500 MUs annually. Of this, 420 MUs, which is 12 per cent of installed capacity, has been earmarked as free power to Nepal. The Nepal Electricity Authority will have 27 per cent free equity stake in the project. At the end of the 25 year concession period, the Group is to transfer the full ownership to the Nepal government.
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The power generated, net of free power and supply to Nepal, if any, is planned to be evacuated through a 400 kV double circuit transmission line up to the interconnection point of Power Grid Corporation of India, in India.
GMR Group chairman, G.M.Rao, said the project will be beneficial for both the countries. Financial closure is expected to be achieved by September 2016 and commencement of the commercial operation is likely by September 2021. The Group will explore strategic/long term capital tie-up of both debt and equity for the project at an appropriate time.