Khimti-1 Hydropower Project Share Ownership Transfer Process Resumes

Kathmandu. 5 years ago, 60 MW Khimti-1 Hydropower Project's half ownership should have come under the Nepal Electricity Authority. As per the electricity purchase agreement signed with the authority on January 1, 2052 BS, 50 percent shares of this project were supposed to come under the authority's ownership five years ago. However, after bringing this project under the government, the company to operate the project should have been established. The transfer of 50 percent shares of Khimti to the authority remained in uncertainty for five years. Both the government and the authority have failed in this. As per the agreement with the authority for the hydropower project, half of the project's ownership should come under the authority's name 20 years after commercial production begins. An agreement was made to operate the project for an additional 20 years by establishing a new company by the authority and the promoter company. The new electricity purchase rate, royalty, and tax payments were supposed to be finalized with that company. However, that work could not be done for five years due to disputes. Although it was supposed to come under the authority's name, this process has not yet been finalized due to various policy and technical misunderstandings. However, with the formation of the current government, the board meeting chaired by Energy Minister Biraj Bhakta Shrestha reconstituted the negotiation committee last Friday to advance the share ownership transfer process. The Authority's Board of Directors has reconstituted the negotiation committee to re-accelerate the stalled discussions on the transfer of share ownership of the Khimti Hydropower Center and its future operation and management. The reconstituted committee is chaired by Authority Board Member Anshu Kiran Shahi. This committee is preparing to formally negotiate with the promoter company Himal Power Limited on issues including project ownership, new electricity purchase agreement (PPA), royalty, and tax payments. In the past, the authority had repeatedly held discussions and consultations with Himal Power. However, the process could not move forward due to disagreements on issues such as project ownership, new electricity purchase agreement (PPA), royalty, and tax payments.

As per the electricity purchase agreement (PPA) signed between the Electricity Authority and the promoter company on January 1, 2052 BS, half of the project's ownership should be transferred to the Nepal Electricity Authority after 20 years of commercial production.