Construction of the 750-MW West Seti, which will be the biggest power plant in Nepal, is expected to start by the end of 2007.

The construction of the mega project located in Doti district, far-western region, will be completed in five years at an estimated cost of USD 1.2 billion, Rastriya Samachar Samiti (RSS) said quoting officials at the construction company West Seti Hydro Limited (WSHL), a subsidiary of Snowy Mountains Engineering Corporation (SMEC) of Australia.

Nepal government has 15 percent share in West Seti project being financed by the Asian Development Bank (ADB) and three Chinese banks.

Under the project agreement (PA) signed in June 1997 the Nepal government had assured to grant all licenses to WSHL for the development, construction, ownership and operation of the project, including generation and transmission licenses for a period of 30 years from the date of issue of the license.

The electricity generated from West Seti will be exported to India. Nepal government will receive revenue for the 10 percent of the power generated as royalty payment.

A power purchase agreement (PPA) with a term of 25 years, to be effective from the start of commercial operation, was signed by WSHL with Power Trade Corporation of India in 2003.

WSHL managing director William Bultitude said the project would be handed over to Nepal government after 30 years.