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ADB to finance Nyera-Amari projects with USD 320M

Hydropower: The Asian Development Bank (ADB) would finance the 442-megawatt (MW) Nyera-Amari hydropower project with USD 320M. The project will be developed on a multi-tranche financing modality, which is similar to the Dagachhu and Nikachhu projects.

ADB’s project document states that the proposed financing modality will support development of runoff the river hydropower plan and transmission system for power export from eastern region.  This means that Druk Green Power Corporation (DGPC) and Bhutan Power Corporation (BPC) are the implementing agencies for construction of hydropower and transmission facilities respectively.

The project is envisaged in two stages with two separate plant facilities in a cascading manner- one powerhouses generating 125MW would be located near Gomdar, the second powerhouse with 317MW capacity would be constructed near Martshala, both in Samdrupjongkhar.

In consideration to the technical and financial viability, both stages are likely to be developed simultaneously because powerhouse of both the plants lie entirely along the left bank of the Nyera-Amari river that flows from Sakteng through Kangpar in Trashigang to Samdrupjongkar.

DGPC’s managing director, Dasho Chhewang Rinzin said the pre-feasibility study shows that the Nyera-Amari project is techno-economically viable. Based on this finding, the government and the DHI have approved DGPC to proceed with the preparation of the detail project report (DPR).

The Pre-Feasibility Study of Nyera-Amari Hydropower Project I and II was carried out at a cost of Nu 16M in 2014.

He said DGPC has already started the DPR and is expected to be finalized by the later part of 2017. “DGPC will prepare the DPR on its own except in areas of specialized detailed design and engineering for which DGPC will recruit consultants.”

Just like Nikachhu that had to form a special purpose vehicle, Tangsibji Hydro Energy Limited to implement the project, the Nyera-Amari also has to form a project company to seek for equity investment from other development partners and to raise capital.

The financing from ADB comes from its two different funding windows, USD 227.94M from Ordinary Capital Resource (OCR) and USD 92.06M from Asian Development Fund (ADF).

The former is a loan offered at near-market terms to countries based on their creditworthiness and the latter window offers loans at very low interest rates to ADB’s borrowing countries.

The construction of the project could commence by 2018 to be completed within five to six year. The project is estimated to cost Nu. 34.78B at April 2014 price level.

Nyera-Amari is estimate to generate 478 MU (million units) of energy from the first stage and 1,222MU from the second, totalling 1,700 MU.

Tshering Dorji

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