Tamakoshi’s electricity is the cheapest, at an average of only Rs 4.6 per unit

KATHMANDU: JULY 5 – The Nepal Electricity Authority (NEA) will be able to purchase electricity from the Upper Tamakoshi Hydropower Project of national pride at the cheapest rate of all the projects so far.

According to the power purchase agreement (PPA) signed between the promoter Upper Tamakoshi Hydropower Limited and Nepal Electricity Authority (NEA) before the construction of the project, the electricity of the project is currently the cheapest.

According to the PPA rate, the Upper Tamakoshi Electricity Authority will get an average price of Rs 4.6 per unit. The price of electricity has been fixed at Rs 6.96 per unit for four months of winter and Rs 3.63 per unit for the other eight months including the rainy season. However, the purchase and sale rate of electricity for most riverine projects has been fixed at Rs 4.80 per unit in winter and Rs 8.40 per unit in the rainy season.

Similarly, according to the PPA, the power of the project will increase at the rate of 3 percent every year for nine years. After purchasing electricity from Tamakoshi for nine years, the power purchase price of the project for the four months of winter will reach Rs 9.8 paisa and for the remaining eight months it will reach Rs 4.73 paisa. The project will get electricity at this rate at 220 KVA substation at Khimti in Tamakoshi.

Consumers will be able to buy from Tamakoshi Electricity Authority at an average of Rs 4.78 per unit in the year of commencement of production. In the ninth year, the consumer price will also increase and they will be able to buy at an average of Rs 6.24 per unit. The consumer price has been determined by adding the transmission leakage at the rate of 15 percent.

The Nepal Electricity Authority (NEA) is currently selling to consumers at Rs 9.5 to Rs 10 per unit. Due to this, it is seen that the authority will get a lot of financial benefit from Tamakoshi’s electricity. By selling electricity at a higher price than the purchase price, the NEA earns billions of rupees annually from Tamakoshi’s electricity. However, as the production cost of the project has doubled, it will take a few years for the project to turn a profit.

After the project becomes profitable, the promoter, founding shareholder companies, government employees, NEA employees, local and general share investors will also receive annual dividend returns. Shareholders can also earn returns from the secondary market by selling and repurchasing their shares.

The company plans to build a 21-megawatt power project from the Rolwaling River to run the 456-megawatt project at full capacity. The river is expected to make Upper Tamakasi run at full capacity even in winter.