Snowy Mountain Engineering Corporation (SMEC) an Australian company has proposed that Nepal should also invest in the 750MW West Seti Hydropower Project, reports said.

SMEC, which is the probable constructer of the project, wants to make it mandatory for Nepal to invest in the project due to the increasing political unrest in the country, the Kantipur daily reported.

Recently, officials of SMEC informed the Ministry of Water Resources that the Asian Development Bank would provide ‘soft loan’ to the Nepal government but that the government would have to invest it in the project. However, the SMEC has not mentioned the amount that needs to be invested.

The total project cost is almost USD 1 billion. According to the agreement this project was to be constructed by SMEC and a Chinese company. According to plans, the entire electricity produced from this project would be sold to India.

SMEC has already signed an agreement with India in this regard.

The paper quoted a source as saying that this informal proposal made by SMEC is being discussed in the Finance Ministry. SMEC has brought forward the issue of ADB’s involvement in this project.

An agreement has already been signed according to which the Chinese company will undertake the entire construction of the project.

According to the agreement, Power Trade Corporation (PTC) would be purchasing a unit of electricity at 4.835 American cents (Rs.3.6) which is almost half the price paid to Khimti and Bhotekoshi hydropower projects.

According to the agreement signed with the government, SMEC would sell electricity to PTC for 30 years. After that the ownership of the project would be transferred to the government at its present condition.