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THIRD MEETING OF THE INFRASTRUCTURE FINANCING AND PPP

NETWORK OF ASIA AND THE PACIFIC

A PRESENTATION ON REAL PROJECT OF PPP

B I J U K U M A R S H R E S T H A

J O I N T S E C R E T A R Y

N A T I O N A L P L A N N I N G C O M M I S S I O N , N E P A L

National Context

Nepal a land-locked, but not potentially locked

(rich natural resources, demographic and geographic dividends)

Unitary to Federal Structure : Stable government at federal, province (7) and local level (753)

Area: 147, 181 Sq. Km

Population: 26.67m (2011 census)

Economic Growth Rate: ~7% (2018), 8.5% (FY 2019/20, targeted)

Total Budget: USD 13.66 billion (FY 2019/20)

Per Capita Income: USD 1074

Development Vision & Goals

National Vision: Prosperous Nepal, Happy Nepali

15 Periodic Plan (2019 – 2023) : Generate Prosperity

16 & 17 Periodic Plan (2023 – 2032) : Accelerate Prosperity

Beyond 2032 : Sustain Prosperity

National Goals:

Least Developed Country (LDC) graduation to developing country by 2022, Middle-Income Country (MIC) by 2030

Full commitment of SDGs achievement by 2030

25 Years Vision Paper (2043) – around 10 % growth targeted, per-capita income USD 12,100

Recent Development – PPP Initiatives

Legal and Policy Framework

Institutional set-up with one stop solution

Setting up of NATIONAL PROJECT BANK at NPC

(Screening, appraisal, selection and prioritization )

39%

56%

5%

ESTIMATED INVESTMENT FROM PUBLIC, PRIVATE AND COOPERATIVE SECTORS FOR 15TH 5-YEAR PLAN

(2019/20-2023/24)

PUBLIC SECTOR

PRIVATE SECTOR

COOPERATIVE

ARUN III HYDROPOWER PROJECT

Investment Size (Approx.) 1.4 Billion USD

Developer SJVN Arun-3 Power Development Company (Promoted by SJVN Limited India)

PPP Model Build, Operate, Own and Transfer ; 25 Years

GoN Partner Ministry of Energy (MOE)Nepal Electricity Authority (NEA)

Location Dam Site: MAKALU RURAL MUNICIPALITYPower House: NA

Design Energy/Year 3685 Ghw

Gross Head 287 m

Reservoir (Gross Storage) 13.94 MCM

SALIENT FEATURES

Dam Height (Max) 68 m

Dam Type Concrete Gravity Dam

Turbine 4x225 MW

Design Discharge 343.42 cumec

Head Race Tunnel 11.74 KM. ,9.5 M

SALIENT FEATURES

Lifetime Royalties to GoN Rs 106. 85 Billion

Lifetime Energy to GoN (Approx Value) Rs 154. 69 Billion

Lifetime Income taxes to GoN Rs 77.10 Billion

Total lifetime financial benefits to GoN Rs 338.66 Billion

FINANCIAL BENEFITS

Local Benefits:Development of the region: Project will generate employment for the locals, boost local industries,and foster entrepreneurship. Other Projects of this scale have generated over 3000 direct jobsduring peak construction period.Industrial Benefits:Nepali suppliers will be given a fair opportunity to compete. Growth of local shops, traders,catering & hotel services, etc.Rural Electrification & Local Shares:Electrification of affected areas and option to purchase shares. 30 units of free electricity fordirectly affected.Robust Community Infrastructure and Financial Support: Construction of roads, bridges, schools,healthcare and community centers, etc. to provide a robust community infrastructure. Skillstraining and other programs will provide great financial support to the affected communities.

ISSUES AND CHALLENGES

WAY FORWARD

OVERVIEW OF ARUN III HEP