Norway firm overtakes Indians in Nepal hydropower deals

By Sudeshna Sarkar

(October, 20, Katmandu, Sri Lanka Guardian) While over a dozen Indian companies have been waiting for nearly a year now to get the nod from the Nepal government for starting new hydropower projects in the Himalayan nation, a Norwegian joint venture has sailed ahead with two new deals under its belt.

Statkraft Norfund Power Nepal, which entered Nepal's power market last year, has bagged the licence for two hydropower projects - Tamakoshi II and III - which can together generate nearly 600 MW.

SN Power, which obtained the licences in March, plans to complete the projects by 2014.

According to local media reports, the World Bank and Asian Development Bank have shown interest in funding the deals and SN Power has started talks with India's Power Trading Corporation to sell the remaining power after domestic consumption in Nepal.

The Norwegian company has been able to steer clear of politics and red tape in which 14 Indian companies -- bidding for various power projects in Nepal -- remain enmeshed.

India's GMR group, a prominent private sector organisation with prime interests in infrastructure and agro business, was adjudged the best bidder for at least two hydel projects.

However, the Indian bid was curbed by Nepal's parliamentarian team looking after natural resources. The MPs have ordered the government to allow only one project at a time to one bidder.

Since then let alone two, GMR has not even been able to get a single licence.SN Power is also interested in a third scheme, the Upper Tamakoshi hydropower project in Dolakha district in north Nepal.

India's Infrastructure Leasing and Financial Services Ltd, has also pitched for the 309 MW project, one of the most attractive in Nepal, last year.

It remains to be seen if the Indian company has any luck. Sharing of water resources remains one of the thorniest issues between India and Nepal.

Nepal's political parties regard India as having arm-twisted earlier Nepali prime ministers into signing unequal water treaties and are opposed to awarding hydropower projects to Indian companies.

While several mega projects discussed between the two governments have been put on the backburner, private companies too have not fared much better.

The water politics has become murkier with the Maoist guerrillas becoming the second-largest party in parliament.

Though the Maoists allowed India to broker a peace pact between them and the opposition parties, they are now vehemently anti-Indian, after Indian prime minister Manmohan Singh's message was delivered to the Nepal government this month through his special envoy, former Indian foreign secretary Shyam Saran.

India wants Nepal to hold its stalled constituent assembly election at the earliest and allow the assembly to decide the fate of Nepal's two-century old monarchy instead of taking an immediate decision on the floor of parliament.

The Maoists, who are trying to avoid an immediate election, have been demanding a parliament vote to decide King Gyanendra's fate, and have resented the Indian message, which they called intervention in the affairs of a sovereign state.