Project Summary Report - Peoples Hydro...
Transcript of Project Summary Report - Peoples Hydro...
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Prepared by:
Peoples Hydropower Company (P.) Ltd PO Box: 14165, Anamnagar, Kathmandu, Nepal
Tel: +977-1-6222304, Fax:+977-1-4720891
E-mail: [email protected]
Web : www.peopleshydro.com
Sep 2013
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Peoples’ Hydropower Company (p) Ltd a
TABLE OF CONTENTS
SECTION-1:
COMPANY INFORMATION....................................................................................................h
1. PROFILE OF COMPANY..........................................................................................1
2. DIRECTORS & PRINCIPAL PROMOTORS .................................................................2
2.1 Board of Directors ............................................................................................................2
2.2 Profile of Directors and Major Investors ............................................................................2
2.3 Major Shareholders..........................................................................................................4
3. CORPORATE PLAN & ANNOUNCEMENT.................................................................5
3.1 Corporate Announcement ................................................................................................5
3.2 Provision for Corporate & Other Investors.........................................................................5
3.3 Provision for Local Peoples ...............................................................................................5
3.4 Management Core............................................................................................................5
3.5 Technical Core..................................................................................................................5
3.6 Account/Finance Core ......................................................................................................6
SECTION-2:
PROJECT RELATED DETAILS ..................................................................................................7
1. INTRODUCTION ....................................................................................................8
1.1 Background......................................................................................................................8
1.2 Project Location ...............................................................................................................8
1.3 Accessibility .....................................................................................................................9
1.4 Project Development & Stages ........................................................................................10
2. PROJECT DESCRIPTION........................................................................................ 11
2.1 General Arrangement .....................................................................................................11
2.2 Salient Features .............................................................................................................11
2.3 Hydrology & Design Discharge ........................................................................................14
2.3.1 Adopted Mean Monthly Flow for Dordi Intake ................................................................ 14
2.3.2 Discharge measurement and verification ........................................................................ 15
2.4 Civil Works Components .................................................................................................15
2.4.1 Headworks ................................................................................................................... 15
2.4.2 Gravel Trap & Side Spillway ........................................................................................... 15
2.4.3 Desander & Flushing Arrangement................................................................................. 15
2.4.4 Headrace Tunnel, Adits & Prumu Collection works .......................................................... 16
2.4.5 Purmu Khola Collection from Adit .................................................................................. 16
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2.4.6 Surge Shaft................................................................................................................... 16
2.4.7 Pressure shaft............................................................................................................... 16
2.4.8 Powerhouse & Tailrace ................................................................................................. 17
2.5 Infrastructure Facilities ...................................................................................................17
2.5.1 Access Road: ................................................................................................................ 17
2.5.2 Camp Facilities.............................................................................................................. 17
2.6 Metal Works ..................................................................................................................17
2.6.1 List of Metal works Components .................................................................................... 17
2.6.2 Penstock Shaft liner ...................................................................................................... 18
2.6.3 Gates, Trash rack & Stoplogs.......................................................................................... 18
2.7 Electromechanical Components ......................................................................................18
2.7.1 Turbine ........................................................................................................................ 18
2.7.2 Governor...................................................................................................................... 18
2.7.3 Inlet Valve .................................................................................................................... 18
2.7.4 Generator .................................................................................................................... 18
2.7.5 Step-up Transformer ..................................................................................................... 18
2.7.6 Outdoor Substation & Switchgears................................................................................. 18
2.7.7 Protection & Control System ......................................................................................... 18
2.8 Communication System ..................................................................................................19
2.9 Transmission Line (132kV) ..............................................................................................19
2.10 Interconnection & Metering Facilities..............................................................................19
2.11 Construction Power........................................................................................................19
3. CONSTRUCTION PLAN......................................................................................... 20
3.1 Mode of Project Implementation ....................................................................................20
3.1.1 EPC Contract ................................................................................................................ 20
3.1.2 BoQ based contract ...................................................................................................... 20
3.1.3 Mixed contract ............................................................................................................. 20
3.2 Contract Packaging .........................................................................................................20
3.3 Construction Schedule ....................................................................................................21
3.4 Organization Setup .........................................................................................................21
3.5 Completed Achievements ...............................................................................................22
3.5.1 Environmental Study..................................................................................................... 22
3.5.2 Surveys and Investigations............................................................................................. 22
3.5.3 Cadastral Survey and Land Acquisition............................................................................ 23
3.5.4 Core Drilling by NEA Soil Lab .......................................................................................... 23
3.5.5 ERT Survey ................................................................................................................... 23
3.5.6 Connection Agreement ................................................................................................. 23
3.5.7 Energy Table Finalization ............................................................................................... 23
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3.6 Further Activities in Priority ............................................................................................23
3.6.1 PPA & Generation License ............................................................................................. 23
3.6.2 Financial Closure........................................................................................................... 23
3.6.3 Infrastructure developments ......................................................................................... 23
4. PROJECT COST & REVENUE ................................................................................. 24
4.1 Presumptions.................................................................................................................24
4.2 Total Cost of the Project .................................................................................................24
4.3 Detail of Base Construction Cost .....................................................................................24
4.4 Detailed Cost calculation ................................................................................................26
4.4.1 Development & Owners cost ......................................................................................... 26
4.4.2 Access Road ................................................................................................................. 26
4.4.3 Building & Camp Houses ............................................................................................... 26
4.4.4 Vehicles ....................................................................................................................... 26
4.4.5 Land Procurement & Lease ............................................................................................ 26
4.4.6 Logistics and Office Equipment ...................................................................................... 26
4.4.7 Civil Works ................................................................................................................... 26
4.4.8 Metal and Hydro mechanical Works ............................................................................... 27
4.4.9 Electromechanical Equipments ...................................................................................... 27
4.4.10 Transmission and Interconnection Facilities................................................................ 27
4.4.11 Engineering, Supervision, Management & Operations ................................................. 27
4.4.12 Environmental Mitigation Works ............................................................................... 27
4.4.13 Miscellaneous and Price contingency ......................................................................... 27
4.4.14 Project Insurance during construction........................................................................ 27
4.5 PPA Rate & Project Revenue ...........................................................................................27
5. PROJECT FINANCING........................................................................................... 29
5.1 Investment & Financing Structure ...................................................................................29
5.2 Equity Capital .................................................................................................................29
5.3 Loan Capital ...................................................................................................................29
5.3.1 Project Loan ................................................................................................................. 30
5.3.2 Working Capital Loan .................................................................................................... 30
5.3.3 Bridge Gap Loan ........................................................................................................... 30
5.4 Drawdown schedule & IDC..............................................................................................30
6. FINANCIAL PROJECTIONS .................................................................................... 31
6.1 Projected Income & Expenditure A/C ..............................................................................31
6.1.1 Sales ............................................................................................................................ 31
6.1.2 Operation & Maintenance Cost...................................................................................... 32
6.1.3 Interest on Bank Loan ................................................................................................... 32
6.1.4 Royalty to Government ................................................................................................. 32
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6.1.5 Depreciation of the Assets............................................................................................. 33
6.1.6 Amortization expenses.................................................................................................. 33
6.1.7 Tax .............................................................................................................................. 33
6.1.8 Dividend ...................................................................................................................... 33
6.2 Projected Balance Sheet .................................................................................................33
6.3 Repayment Schedule ......................................................................................................34
6.4 Debt Service Coverage Ratio ...........................................................................................34
7. PROJECT EVALUATION ........................................................................................ 35
7.1 Basic Assumptions..........................................................................................................35
7.2 Financial Analysis ...........................................................................................................35
7.2.1 Net Present Value ......................................................................................................... 35
7.2.2 Internal Rate of Return.................................................................................................. 35
7.2.3 Benefit Cost Ratio /Profitability Index............................................................................. 35
7.2.4 Payback Period ............................................................................................................. 35
7.2.5 Return of Equity (RoE) ................................................................................................... 35
7.2.6 Debt Service Coverage Ratio .......................................................................................... 36
7.2.7 Cost per unit of Electricity Generation: ........................................................................... 36
7.3 Sensitivity Analysis .........................................................................................................36
7.4 Risks analysis .................................................................................................................37
7.5 Findings and Discussion ..................................................................................................37
8. CONCLUSION & RECOMMENDATIONS ................................................................ 39
8.1 Conclusions....................................................................................................................39
8.2 Recommendations .........................................................................................................39
STATUARY DOCUMENTS & ANNEXES.......................................................................... 40
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List of Figures
Figure 1-1: Project Location in Topomap showing the components ............................................................... 8
Figure 1-2: Project Location & nearest markets .............................................................................................. 9
Figure 1-3: Progress Development stages and flow chart for reference ....................................................... 10
Figure 2-1: Components Layout including alternatives .................................................................................. 11
Figure 2-2: Super Dordi Catchment (Dordi & Prumu Khola) ........................................................................... 14
Figure 2-3: Flow variation pattern in the river and design discharge ............................................................. 15
Figure 2-4: Typical Section of Underground Structures & Stress Distribution................................................ 16
Figure 2-5: Location of powerhouse area on left bank of Dordi Khola........................................................... 17
Figure 3-1: Organizational Setup. ................................................................................................................... 22
Figure 4-1 : Monthly Revenue Generation Trend ........................................................................................... 28
List of Tables
Table 1-1: Road Distance to Project Site........................................................................................................... 9
Table 2-1: Mean monthly flow available at Intake of Project Site (m3/s) ...................................................... 14
Table 3-1: Major milestones for implementation of the Project .................................................................... 21
Table 4-1: The summary of the project (in 000) ............................................................................................. 24
Table 4-2: The Details of Project Base cost..................................................................................................... 25
Table 4-3: PPA rate and resulting financial indicators .................................................................................... 27
Table 4-4: Signed Contract Energy Table with NEA/PTD ................................................................................ 28
Table 5-1: Proposed Capital Structure for financing....................................................................................... 29
Table 5-2: Typical Financing Scanario with Foreign Loan/ FDI........................................................................ 29
Table 5-3: Drawdown Schedule and Interest during Construction................................................................. 30
Table 6-1: Projected Income Statement ......................................................................................................... 31
Table 6-2: Estimated O&M for the first year of operation (In NRs, 000) ........................................................ 32
Table 6-3: Royalties Schedule and benefit from project for government revenue ........................................ 32
Table 6-4: Projected Balance Sheet ................................................................................................................ 33
Table 6-5: Typical Loan Repayment Scenario for Local Bank Financing.......................................................... 34
Table 6-6: The Debt Service Coverage Ratio for Various Years of Operation ................................................. 34
Table 14-1: Revenue Sensitivity result............................................................................................................ 36
Table 14-2: Cost Sensitivity Result at 12% discount rate ................................................................................ 36
Table 14-3: Interest Rate Sensitivity Result .................................................................................................... 36
Table 14-4: Variation on PPA rate................................................................................................................... 36
Table 14-5: Effect on project completion delay.............................................................................................. 36
Table 7-6: Financial Analysis & Sensitivities Results summary ....................................................................... 37
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List of Acronyms
A/C Account
AC Alternating Current
ACSR Aluminum Conductor Steel Reinforced
amsl above mean sea level
B/C Benefit/Cost
Bi.Bi.Bi Bidhyut Bikash Bivag
BoQ Bill of Quantity
CA Chartered Accountant
CB Circuit Breaker
CDMA Code Division Multiple Access
CEC Clean Energy Consultants (P.) Ltd
COD Commercial Operation Date
CT Current Transformer
Cumecs Cubic meter per second
D/S Down Stream
DC Direct Current
DDC District Development Committee
DHM Department of Hydrology and Meteorology
DoED Department of Electricity Development
DPR Detail Project Report
DS Disconnecting Switch
DSCR Debt Service Coverage Ratio
E&M Electromechanical
EIRR Equity Investors’ Internal Rate of Return
EL Elevation
EMI Equal Monthly Installment
EPC Engineering, Procurement and Construction
ERT Electrical Resistivity Tomography
FDC Flow Duration Curve
FY Financial Year
GoN Government of Nepal
GWh Giga Watt hour
HEP Hydro Electric Project
HP Hydropower Project
HV High Voltage
HW Head Works
Hz Hertz
ICB International Competitive Bidding
IDC Interest during Construction
IEE Initial Environmental Examination
IPPs Independent Power Producers
IRR Internal Rate of Return
kA kilo Ampere
km kilometer
kV kilo Volt
kVA kilo Volt Ampere
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kW kilo Watt
LA Lightning Arrester
LC Letter of Credit
LCB Local Competitive Bidding
mm millimeter
msl mean sea level
MT Metric Ton
MW Mega Watt
MWh Mega Watt hour
NEA Nepal Electricity Authority
NPV Net Present Value
NRs Nepalese Rupees
O & M Operation and maintenance
ONAN Oil Natural Air Natural (Cooling System)
PF Power Factor
PH Power House
PHCPL Peoples Hydropower Company (P).Ltd
PLC Programmable Logic Controller
PPA Power Purchase Agreement
Ppm Parts per million
PT Potential Transformer
Q40% 40% probability of exceedence
RCC Reinforced Cement Concrete
RoR Run of River
rpm Revolution per minute
S/S Sub-Station
SF6 Sulpher Hexa Flouride
SHP Small Hydropower Project
Sq. km square kilo meter
SS Substation
ST Surge Tank
T/L Transmission Line
ToR Terms of Reference
U$ US Dollar
U/S Up Stream
UH Unit Hydrograph
US Upstream
VAT Value Added Tax
VCB Vacuum Circuit Breaker
VDC Village Development Committee
WL Water Level
XLPE Cross Linked Polyethylene
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SECTION-1:
COMPANY INFORMATION
Super Dordi Hydroelectric Project-Kha, 49.6MW Sep 2013
Peoples’ Hydropower Company (p) Ltd 1
1. PROFILE OF COMPANY
Peoples’ Hydropower Company (P) Ltd
1. Registration No. : 48657/064/65
2. Place of Registration : Office of the Company Registrar, Ministry of Industry, Commerce &
Supplies
3. Date of Registration : 2064/6/22 (9 October 2007)
4. Type of Company : Private Limited Company
5. Registered Address : Kathmandu -9
6. Current Address : KMC-32, Anamnagar Kathmandu, Nepal
7. Postal Address : P.O. Box :14165, Kathmandu
8. Contact Details : Tel: +977-1-6222304,
Fax:+977-1-4720891
E-mail: [email protected]
Web : www.peopleshydro.com
9. Objectives of Company : • Carryout hydropower project survey, study, construction and
distribution from the rivers in the nation
• Carryout Training, Seminar, Workshop to produce manpower
related to hydropower
• Purchase power from different producers and distribute
• Generate electricity and sell that power to national and
international company to gain foreign currency
• Acquire projects under construction or unable to operate on
procurement or lease basis for operation
• Explore alternative energy sources like wind power, solar, biomass
etc study them and implement
• Collect small investor for the investment on company and
participate on development
• Provide investment opportunity to all range of population like,
local level peoples, government bodies, organization,
corporations, industrialists, businessman, serviceman, and general
peoples etc
• Impart cooperation with government for the construction of
infrastructure for the development of the projects
• Manage separate fund for the welfare and cooperation of local
peoples on the basic needs line health, education, self
employment etc
10. Present Venture : Promoter of Super Dordi-Kha HEP, 49.6MW run-of-river type
hydropower project in Dodri in Lamjung District.
11. Capital Structure : Authorized Capital : Rs. 2000 Millions
Issued Capital : Rs. 2000 Millions
12. Board of Directors : 6
13. Tax Office Registration : PAN NO. 302754315
14. Bank : Janata Bank Nepal Ltd.
New Baneshwor, Kathmandu
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2. DIRECTORS & PRINCIPAL PROMOTORS
2.1 Board of Directors
A board of directors has been formed for smooth operation of company as well as project and it has
implimented from 2066/04/01 and current board members of the Peoples’ Hydropower Company Pvt. Ltd
(PHCPL) are as follows:
a) Mr. Udaya Nepali Shrestha, Chairman
b) Mr. Keshav Bdr. Rayamajhi, Managing Director
c) Mr. Gokul Shrestha, Director
d) Mr. Dharma Dhoj Parajuli, Director
e) Mr. Arjun Gautam, Director
f) Mr. Bhim Pd. Paudyal, Director
2.2 Profile of Directors and Major Investors
A. U.N. Shrestha
Presently Mr Udaya Nepali Shrestha is the Chairman in the Board Director of PHPC . Mr Shrestha holds
Master's Degree in Management, Economics and Law from Nepal and abroad. Mr. Shrestha has served in
Nepal government in different capacity for 30 years. Just before retirement as the Vice chairman of
Nepal Law Reform Commission for 3 years (2003- 2006), he was the Secretary of Ministry of Law, Justice
and parliamentary Affairs for five years (1997- 2003).He has experience of different national &
international conferences, seminars, meetings, course study, trainings etc. in matter relating to law
economies and administration. Mr. Shrestha has visited many countries of the world. His involvement in
different corporate and social sectors includes the followings:
Present Involvement:
• Chairman – Janata Bank Nepal Ltd.
• Chairman – International Development Lawyers' Organization
• Chairman – (DEAN) Democracy and Election Alliance for Nepal
• Chairman – Peoples Hydropower Company Pvt. Ltd.
• Executive Member– Nepal Councial of Arbitration
• Excutive Member– Nepal Law Sociaty
• Chief Legal Advisor – Patan Academy of Health Science
• Chief Legal Advisor – Karnali Academy of Health Science
Past Involvement:
• Chairman – Nepal SBI Bank Ltd.
• Chairman – Nepal Investment Bank Ltd.
• Board Director – Nepal Telecommunication Corporation.
• Board Director – Rastriya Banijya Bank.
• Board Director – Administration Staff Collage.
• Board Director – Nepal Guthi Sansthan.
• Member (Judge) – Administration Court of Nepal.
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B. K. B. Rayamajhi
Mr. Rayamajhi is Managing Director in the Board of Director of PHPC and is of 50 years in age. Mr.
Rayamajhi holds Bachelor’s Degree in Management (B. Com.) from Tribhuvan University, Nepal. Mr.
Rayamajhi has served in different hydro companies for last 5 years in various responsible positions. He is
currently devoted to hydropower development and other corporate sector with the following
professional affiliations:
• Managing Director, Peoples Hydropower Company (P) Ltd.
• Managing Director, Chandra Surya International Nepal Pvt. Ltd.
• Director, Janata Bank Nepal Ltd.
• Director, Janata Press Pvt. Ltd.
• Director, Alpine Live Stock & Bio-Trade Pvt. Ltd.
• Director, Sadabahar Trading & Investment Co. Pvt. Ltd.
• Propritor, New Kodari Traders
Mr. Rayamajhi is Senior Vice-President of Nepal Trans Himalayan Boarder Commerce Association.
C. Gokul Shrestha
Mr. Shrestha is Board of Director of PHCPL and is of 52 years in age. Mr. Shrestha holds Bachelors Degree in
Business Administration from Tribhuvan University of Nepal. Mr. Shrestha has been serving in woolan
business as well as energy sector in various responsible positions. Currently, he is also devoted to
hydropower development and other corporate sectors with the following professional affiliations:
• Chairman, Gogang Investment Co. Pvt. Ltd
• Director, Peoples Hydropower Company Pvt. Ltd
• Advisor, Janata Bank Nepal Ltd.
• Director, Upper Hewa Hydropower Project 8.5 MW
• Director, Janata Press Pvt. Ltd
• Director, Alpine Livestock Company Pvt. Ltd
• Koshi conacern (woolan Business)
D. Dharma Dhoj Parajuli
Mr. Parajulil is Director of the Board of Director of PHPC and is of 43 years in age. Mr. Parajulil holds
Bachelor’s Degree in Economics and Bachelors Degree in Law. Mr. Parajuli has been serving in
Educational sector as well as business sector in various responsible positions. Currently, he is devoted to
the hydropower development and other corporate sectors with the following professional affiliations:
• Chairman, Merchant Investment Company Ltd.
• Director , Peoples Hydropower Company Pvt. Ltd
• Director, Janata Bank Nepal Ltd
• Founder, Santona Memorial Multiple Campus
E. Arjun Prasad Gautam
Mr. Gautam is Director of the Board of Director of PHPC and is of 48 years in age. Mr. Gautam has served
in different hydro companies for last 7 years in various responsible positions. Currently, he is devoted to
the hydropower development and other corporate sectors with the following professional affiliations:
• Managing Director, Sadabahar Trading & Investment Co. Pvt. Ltd.
• Director , Peoples Hydropower Company Pvt. Ltd
• Director , Barun Hydropower Company Pvt. Ltd (4.5 MW in operation)
• Founder, Janta Bank Nepal Ltd.
• Director, Alpine Live Stock & Bio-Trade Pvt. Ltd.
• Director, Janata Press Pvt. Ltd.
• Founder, Silk Road International College
Mr. Gautam is Secretary of Nepal Trans Himalayan Boarder Commerce Association.
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F. Bhim Lal Paudyal
Mr. Paudyal is Director of the Board of Director of PHPC and is of 47 years in age. Mr. Paudyal has served
in different hydro and other companies for last 5 years in various responsible positions. Currently, he is
devoted to the hydropower development and other corporate sectors with the following professional
affiliations:
• Chairman, Janata Press Pvt. Ltd.
• Chairman, Janata Traders Pvt. Ltd.
• Chairman, Saugat Footwear International Pvt. Ltd.
• Managing Director, Sadabahar Trading & Investment Co. Pvt. Ltd.
• Director , Peoples Hydropower Company Pvt. Ltd
• Founder , Barun Hydropower Company Pvt. Ltd (4.5 MW in operation)
• Chairman, Forever Business Group Pvt. Ltd.
• Director, SOPAN Investment Company Ltd.
• Chairman, Richmond College
• Founder, Janata Bank Nepal Ltd.
• Founder, Innovative Development Bank Ltd.
• Founder, Lumbini Insurance Company Ltd
• Director, Alpine Live Stock & Bio-Trade Pvt. Ltd.
• Founder, Agni Cement Industries
• Founder, Kisan Pipe Industries Pvt.Ltd
• Director, Royal Shoes Industries Pvt. Ltd
• Proprietor, Saugat Impex
Mr. Padyal is Executive member of Nepal Chamber of Commerce and also First Secretary of Nepal Trans
Himalayan Boarder Commerce Association.
2.3 Major Shareholders
There are number of shareholders who have already invested in this company and are committed for the
promotion of the project and active participation for the project development:
• Chiranjibi Dwa (Pokhara Group)
• Tikaram Pandey (Butwal Group)
• Barun Hydropower Company
• Merchant Investment Company
• Narayan Pandey (Kavre Group)
• Cheef Bdr. Thapa(China Trading Group)
• Sahara Co-operative (Jhapa Group)
• Jamindra Man Ghale(Hongkong Group)
• Super Dordi Investment(Local Investors)
• Ijan Baral
• Vivek J. B. Rana
• Consultants & Staffs
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3. CORPORATE PLAN & ANNOUNCEMENT
3.1 Corporate Announcement
The Board has announced some important notice and information about the development, investment,
construction and operation of the project through its corporate planning and management of the company.
A general information paper has been issued in Nepali language to attract the potential investor around the
globe. Specially, there is provision for potential investors including NRN, locals, and other investors inside
the nation and abroad.
3.2 Provision for Corporate & Other Investors
The board has allocated share for the provision of incorporating corporate investors which infact
contributes primarily on financing of the project leading to implementation. The corporate investment can
be as high as 49%. Any other investors are kept open for investment in this window.
3.3 Provision for Local Peoples
The local peoples are encouraged to invest in this project as much as they can and allocated up to 10% of
the share. The participation of local is considered as token of good faith from the local peoples and sign of
prosperity. The local peoples can invest in organized way by formation of a cooperative and can send their
representative on the board representing the local peoples.
3.4 Management Core
The board has delegated some of the personnels in major role as functional management. Four members of
the Board of directors are deputed for overall day to day management and operation of the company.
Besides the core there is technical and financial cores helping the implementaiton of the project in time.
Group Members
Chairman - Mr. Udaya Nepali Shrestha
Managing Director - Mr. K. B. Rayamajhi,
Director - Mr. Gokul shrestha
Director - Mr. Dharma Dhoj Parajuli
Director - Mr. Arjun Gautam,
Director - Mr. Bhim Pd. Paudyal,
3.5 Technical Core
Some experienced and energetic technical persons are considered as trechnical core as well as development
partners with the major function related to technical and implementation issues of the project. Following
members are present in the technical core group leading to overall technical matter and decision for the
construction of the project. There are other experts in contact roster but the following core is responsible
for technical matters of the project and implementaiton:
Group Members
Design Coordinator - M. R. Dahal
Eng. Geologist - Dr. Ananta Gajurel
Tunnel Design - Babu Kr Bhandari
Economic /Finance - Narayan Pd Paudel, CA
E&M and Transmission Line - Er. Santosh Dhakal
Hydrological Study - Mr. Jagat Bhusal
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3.6 Account/Finance Core
The core is delegated for day to day function relating to finance, tax, record keeping and operation of
Accounting system for prompt reporting. Four members are working as Account Core, dealing all financing
and accounting matters, and informing the Board of Directors about the status and smooth operatin of
company. The team will also be devoted for fund raising and cash flow planning with the help of other
board members time to time, having the follows members presently:
Group Members
Representation of Board - K. B. Rayamajhi
Finance Controller - N. Pd. Paudel, CA
Accountant - Ram Kafle
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SECTION-2:
PROJECT RELATED DETAILS
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Peoples’ Hydropower Company (p) Ltd 8
1. INTRODUCTION
1.1 Background
Super Dordi Hydropower Project-Kha is located in Dordi Khola in Lamjung District of Nepal. There are lots of
projects in Marsyandi basin under detailed study and construction stage. The developers have started the
activities for the preparation of construction of the project.
This current report presents summary of the company and project information with updated information and
relevant financial projections based on updated feasibility study produced on Sep 2013. This includes the
updated information containing new development activities till Sep 2012 incorporating the cost updates and
changes on company structure with new financing scenarios. This report includes the followings:
• Company related information
• Corporate plan for the development of the project
• Basin parameters description like discharge, head, geological study
• Technical information about project general arrangement and planning
• Development status and further planning for project development
• Cost breakdowns of different headings and potential revenue analysis of the project.
• Financial projections, financial indicators with sensitivity analysis.
The outcome of this report is expected to be useful for the purpose of reference to potential investors, funding
agencies as quick reference of the project and development activities.
1.2 Project Location
Super Dordi Hydropower Project-Kha (49.6MW) site is located in Dhodeni and Phaleni VDCs of Lamjung District in
western part of Nepal. Geographically the project area is located between Survey License boundary provided by
DoED :
Longitudes 84034’15” E and 84
031’00” E
Latitudes 28018’50” N and 28
016’20” N
The project area belongs to middle and higher mountains with upper catchments of Dordi Khola extended up to
the elevation of 7893 m above the mean sea level. The Dordi Khola originates from the south-eastern slope of
Himal Chuli (7893amsl), and western slope of Baudha Himal (6672amsl) of Lamjung district. The river has
contribution of snow catchment mostly in the lean season. The location map of the project site is shown in figure
below:
Figure 1-1: Project Location in Topomap showing the components
Super Dordi Hydroelectric Project-Kha, 49.6MW Sep 2013
Peoples’ Hydropower Company (p) Ltd 9
1.3 Accessibility
There is transportation and access facility is available from Bhoteodar, on the way to Besisahar, up to Jhumswara
Village which is just 3.5km d/s of powerhouse. Super Dordi Hydropower Project -Kha has to build access road
from Jhumswara village to PH, adits and headworks site.
Table 1-1: Road Distance to Project Site
SN Distance from To Distance (Km) Type of Route
1 Kathmandu(Kalanki) Dumre 128.97 Prithivi Highway
2 Sunauli Narayanghat 137.9 Siddhartha-Mahendra Highway
3 Narayanghat Dumre 60.52 Black Topped Highway
4 Dumre Bhoteodar 33.43 Black topped district road
5 Bhoteodar Chhote Khola 22 Earthen road already built
6 Chhote Khola Power House 3.5 To be constructed
7 Power House headworks site 12 To be constructed
Total Road Length From Kathmandu to PH 187.9
Total Road Length From Narayanghat to PH 119.45
Total Road Length From Sunauli to PH 257.35
Although there is earthen road from Bhoteodar to Jhumswara Village, this project has to take the responsibility of
widening the road, clearing and maintenance in coordination with the other projects in Dordi Khola.
Figure 1-2: Project Location & nearest markets
Project AreaProject AreaProject AreaProject Area
Super Dordi Hydroelectric Project-Kha, 49.6MW Sep 2013
Peoples’ Hydropower Company (p) Ltd 10
1.4 Project Development & Stages
After identifying the project in 2007, PHCPL obtained the survey license (Bi.Bi.Bi. 065/066 Bi.U. Sa.) and
completed Detailed Survey, Feasibility Study, Layout Survey, Cadestral Survey, Land Demarcation, Connection
Agreement with NEA for power evacuation, IEE study, Energy Table finalization, ERT Survey, Core Drilling etc for
the development of the project at 49.6MW capacity. Presently the project is at PPA stage and obtaining
generation license and financial arrangement for loan and equity. Developers are procuring land at site and
working for infrastructure development at site like Road, Camp, Construction power etc.
Figure 1-3: Progress Development stages and flow chart for reference
Survey License & Study of
21MW option
Site Visits, Topographical, hydrological,
Geological & T/L Surveys
Further Geotechnical
Investigations and tests
Scoping and TOR for IEE
and its approval
Final
Feasibility Study Report
Interconnection Agreement
and evacuation details
Power Purchase Agreement
(PPA)
Generation License Loan arrangement & Financial
Closure
Construction Detailing
Construction, Testing & Commissioning
Commercial Operation
Alternative Study Project
Optimization & Up-gradation,
General arrangement
Tender Document Detailed Engineering
Letter of Interest
from Bank/FIs
Tendering, Evaluation
Award & Mobilization
IEE Study
Approved
Super Dordi Hydroelectric Project-Kha, 49.6MW Sep 2013
Peoples’ Hydropower Company (p) Ltd 11
2. PROJECT DESCRIPTION
2.1 General Arrangement
It is a Run-of-River type of project utilizing water of Dordi Khola and collection of Purmu at the Adit site. The
discharge of Dordi Khola shall be diverted to the left side of the river towards gravel trap. Course material up to
20mm shall be settled in Gravel Trap.
There will be inlet portal towards underground desander for the settlement of fine sediment of size up to
0.15mm. The headrace tunnel of 4.8km follows to underground surgetank at the end of horizontal portion after
Taje Village on the ridge before Lodo Khola.
Figure 2-1: Components Layout including alternatives
There are two intermediate adit at Prumu Khola and Kyame Khola. Prumu Khola discharge will be collected in
headrace tunnel from the same access tunnel near purmu khola. After the surge tank, there will be underground
inclined penstock shaft which directly delivers flow to surface power house having vertical axis Pelton turbines.
The discharge will be release back to Dordi Khola near confluence with Lodo khola from tailrace canal.
There will be generators, control panels, power transformers, 132kV switchyard and single circuit transmission
line to proposed Dordi Corridor Hub at Kirtipur which is further connected to Udipur 220/132kV substation for
power evacuation to national grid. The company has signed connection agreement for the evacuation of the
power through Udipur substation after 2017.
2.2 Salient Features
The following is the brief salient feature of Super Dordi Hydropower Project-Kha.
1. Project Details
Project Name :
Location of Project Site : Dhodeni and Phaleni VDC of Lamjung
Type of Scheme : Run of River
Super Dordi Hydroelectric Project-Kha, 49.6MW Sep 2013
Peoples’ Hydropower Company (p) Ltd 12
Installed Capacity : 49.6MW
Gross head : 601.42m
Rated Design head : 584.36 m
Design Plant Discharge : 9.9 m3/sec at Q40%
2. Hydrology
Catchment Area Dordi : 142.50 sq km
Catchment Area Purmu : 9.10 sq km
Average annual precipitation : 2035 mm/year
100 years Design Flood (HW) : 300 m3/sec
Design Discharge Dordi Intake : 9.30 m3/sec (Q40%)
Design Discharge Prumu Intake : 0.60 m3/sec (Q40%)
3. Headworks
Diversion structure : Free flow weir
Length of weir : 17.0m
Weir crest elevation : EL 1847.0msl
Undersluice : 1 Vertical Sluice gate
Side Intake : 3.5x1.2 - 3 nos
4. Gravel Trap
Type : Rectangular
Particle Size to be settled : 20mm
Size of Gravel Trap : 3.0mx1.75-5.5 m; 40 m length
Bed Slope : 1:10(Main Part)
5. Desander
Type : Dufour Double Chamber
Particle Size to be settled : 0.15mm
Size of Desander : 2 Chambersx82x10.0mX7.57m-9.81m;
Bed Slope : 1:50
Flushing Tunnel Length : 191.0m
6. Headrace Tunnel
Tunnel Length : 4864 m
Size of Tunnel : D shaped(2.6m and 1.3 radius at top)
Flushing Tunnel at Desander : 2.0mx2.0 Inverted "D" shaped
Access Tunnel to Desander : 2.6mx 2.6m "D" Type x 90m
Adit Tunnel at Purmu : 2.6mX2.6m (189m)
Adit Tunnel at Kyame : 2.6mX2.6m (390m)
Rock Trap : 2.6mX2m; 20 m length
7. Surge Shaft and Adit to Shaft
Type : Underground, Cylindrical, Concrete Lined
Dia of Tank : 6.0m
Dia Of orifice : 2.0m
Total Height : 43.85m
Adits for Surge Shaft : 58.0m length
Size of Adits : 2.6mX2.6m inverted "D" Type
8. Penstock Shaft
Type : Steel Lined Inclined Shaft
Length : 1185.0m (Including All Branches)
Pipe Material : High Strength steel
Size of Pipe : 2.0m dia, 10-50mm
Number of Adits for Shaft : 1 nos
Penstock Access Adit : 1x Inverted “D” (2.6mX2.6m) 186m
Super Dordi Hydroelectric Project-Kha, 49.6MW Sep 2013
Peoples’ Hydropower Company (p) Ltd 13
9. Power house
Type : Surface with bedrock cutting
PH dimension (l x b) : 45 x 15 m
Height of PH building : 10.2 from Floor Level
10. Tail race
Type : Rectangular RCC
Size (wxh) : (2.0 to 4.0m) x2m
Length : 96.0m (Including all Units)
11. Turbine
Type of Turbine : 3 units of Pelton in vertical arrangement
Rated discharge for each turbine : 3.3 m3/s
Rated Output for each unit : 17500 kW
Rated Efficiency : 91 %( at 100% discharge)
12. Generators
Generator : 3 nos x AC Synchronous
Excitation : Brushless excitation
Rated Voltage : 11.0 kV
Power Factor : 0.85
Layout : Vertical
Rated Efficiency : 96 %
Rated Output : 19500 kVA
13. Power Transformer
Type : Step up power transformer
Rated Efficiency : 99 %
Rated Capacity : 20500 kVA
No of Unit : Single phase x 3 units and 1 spear unit extra
Type of Cooling : ONAN(oil natural air natural)
Voltage Ratio : 11 /132 kV
14. Station Supply Transformer
Type : Indoor type
Rate Power output : 200 kVA
No of Unit : 2
Type of Cooling : ONAN
Voltage Ratio : 11.0/0.4 kV
15. Transmission & Interconnection
Power House – Proposed Kirtipur S/S : 132kV x 5.2 km
Type of Circuit : Single circuit
Line Conductor : ACSR WOLF 150 mm2
Proposed Interconnection Point : Dordi 132kV Hub Substation at Kirtipur
16. Power and Energy
Installed Capacity : 49.6 MW
Total Gross Energy : 301.578 GWh
Deemed Generation (Contract Energy) : 289.464 GWh
Wet Saleable Energy : 244.105 GWh (84%)
Dry Saleable Energy : 45.360 GWh (16%)
17. Construction Period : 3 years
Super Dordi Hydroelectric Project-Kha, 49.6MW Sep 2013
Peoples’ Hydropower Company (p) Ltd 14
18. Financial Indicators
Base Cost of the Project (without IDC) : NRs 7373.476 millions
(US$ 71.587 millions)
Cost per kW with IDC : U$ 1623 (1 US $ = NRs. 103)
Loan/Equity Ratio : 80:20
Loan Interest Rate : 12%
PPA Rate Considered : 6.20 per unit
IRR : 16.9%
B/C Ratio : 1.46
RoE : 29.2%
2.3 Hydrology & Design Discharge
Dordi Khola is one of the major tributaries of Marsyandi River flowing from North to South and westward
direction in Lamjung district of Western Development Region, Nepal. Dordi Khola joins Marsyandi River near
Bhoteodar Lamjung, D/S of Middle Marsyandi Hydropower Project’s headworks.
DHM has a gauging station in Dordi Khola at Ambotebagar and there is discharge record from 1986 from this
station which is reliable source for discharge at the river. Additionally, Purmu shall be collected on the way on
headrace tunnel alignment through construction adit in Purmu Khola. The hydrology is considered as reliable and
safe for power generation.
Figure 2-2: Super Dordi Catchment (Dordi & Prumu Khola)
2.3.1 Adopted Mean Monthly Flow for Dordi Intake The long term mean monthly flows of Dordi Khola for the power generation are adopted from regional regression
method and the value of MIP method is used for Purmu discharge. The available mean monthly flow available for
power generation in the project is presented below:
Table 2-1: Mean monthly flow available at Intake of Project Site (m3/s)
Month Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Dordi Intake 3.48 2.93 2.93 3.08 6.68 13.19 40.97 47.15 32.85 14.66 8.31 5.11
Purmu Intake 0.26 0.19 0.14 0.11 0.28 0.64 1.55 2.67 1.76 0.85 0.44 0.33
Tot. Available discharge 3.74 3.12 3.07 3.19 6.96 13.83 42.52 49.82 34.61 15.51 8.75 5.44
10% minimum release 0.31 0.31 0.31 0.31 0.31 0.31 0.31 0.31 0.31 0.31 0.31 0.31
Flow to Turbine 3.43 2.81 2.76 2.88 6.65 9.60 9.60 9.60 9.60 9.60 8.44 5.13
Dordi River
Buddha Himal
Ganesh Himal
Purmu Khola
Intake
Tunnel Alignment
Super Dordi Hydroelectric Project-Kha, 49.6MW Sep 2013
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Flow Veriation Pattern
0
10
20
30
40
50
60
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov DecMonths
Dis
char
ge
(m3/
s)Flow toTurbine
AvailableDischarge
Figure 2-3: Flow variation pattern in the river and design discharge
Super Dordi Hydropower Project-Kha will utilize the design discharge as indicated in table above and the project
can be developed with Q40% discharge as per prudent utility practice or even lower based on optimization study.
The design discharge equivalent to 9.3 m3/s and 0.6 m3/s from Dordi and Prumu irrespectively may be utilized
for power generation for the proposed project.
2.3.2 Discharge measurement and verification Since the identification of the project, a gauging station was established near intake site. The data at Dordi intake
and Prumu collection intake are being collected since Jan 2009. The spot measurements show the sufficiency on
predicted data.
2.4 Civil Works Components
There will be major components like Headworks, Gravel Trap, Desander, and Headrace Tunnel, Surge shaft,
Pressure Shaft, Powerhouse, Tailrace and Switchyard etc. Besides these, for the access of tunnel there will be
adits and portals with muck disposal facilities and protection structures.
2.4.1 Headworks There will be free flow weir of spillway length 17m having crest at 1847m elevation. There will be side intake with
three orifices each of 3.5 m x1.2 m. Vertical gate of 3.0 m x3.0 m size shall be provided before the orifice of side
intake used as undersluice for flushing. There will be trash rack in the intake. The top of the weir shall be fully
armored with selected hard stone lining to prevent from erosion.
2.4.2 Gravel Trap & Side Spillway Gravel of size up to 100 mm can enter from the intake to the gravel inlet chamber and gravel trap. The proposed
gravel trap is located just downstream of the intake in left bank provided with a side spillway. Gravel size up to 20
mm shall be settled and flushed back to the river from the gravel trap
2.4.3 Desander & Flushing Arrangement Based on the topographic condition, underground Dufour type of continuous flushing Desanding basins have
been proposed for settling of finer particles. Since Super Dordi is a high head project, the basin has been
designed in order to settle the particle size up to 0.15 mm at minimum of 90% trap efficiency and the desander
has been designed for sediment load of 5000 ppm.
There is a flushing tunnel (2m diameter, 191m long) provided at the end of Desanding basin connected to
flushing duct and flushing gates of 0.8m wide and 1.0m deep. There will be an access tunnel of Inverted D-shape,
2.6 m in diameter purposed having length of 90m
Super Dordi Hydroelectric Project-Kha, 49.6MW Sep 2013
Peoples’ Hydropower Company (p) Ltd 16
2.4.4 Headrace Tunnel, Adits & Prumu Collection works The project area lies in the Lesser Himalayan unit in Western Nepal. The Lesser Himalaya is occupied by medium
to high grade metamorphic rocks such a, phyllite, dolomite, quartzite, schist and gneiss. The schist and gneiss are
main rock types found in the project area.
Underground Desander Stress pattern Support & plastic zone thickness in HR Tunnel
Figure 2-4: Typical Section of Underground Structures & Stress Distribution
The geology of the project area favours for tunnelling works, low pressure tunnel has been proposed to carry
clear water from desander to surge tank. The headrace tunnel has been designed as inverted D shaped with 2.6m
finished diameter. The support thickness varies depending on rock mass class.
There will be two adits from two locations e.g., one 189m long from Prumu Khola and another 390m long from
Kyame Khola of size similar to that of headrace tunnel for supporting construction works and transportation.
2.4.5 Purmu Khola Collection from Adit Purmukhola Adit-1 is also used to collect maximum of 0.60m3/s of design discharge from Prumu Khola in dry
season. There will be diversion weir, gravel trap/desander and collection pipe to the adit tunnel on Purmu Khola.
2.4.6 Surge Shaft A cylindrical underground Surge Shaft is proposed at end of headrace Tunnel and starting of pressure shaft
having 6m diameter and 43m high with restricted orifice for the following reasons.
� To relief the pressure wave developed due to the water hammer at the time of sudden load rejection
from turbine through an open atmospheric zone as closest to the plant.
� To protect headrace from the harmful pressure waves and water hammer.
� To improve the regulation of flow by the supply required for isolated operation at fast load changes.
There will be a 58m long surge shaft Adit to facilitate construction of headrace tunnel providing a working face
form the end. For removal of loosed rock and displaced shotcrete during construction and operation a rock trap
is proposed just before surge shaft at the last of headrace tunnel.
2.4.7 Pressure shaft An 1185 m long inclined pressured shaft with an internal diameter of 2.0m to 1.15 m is proposed to delivery
water from surgetank and headrace tunnel to powerhouse. There will be extra steel lining varying from 10mm-
50mm confirming to high pressure to be provided inside the shaft in order to resist the water hammer.
At the middle section of the shaft, there will be an Access adit to the shaft at horizontal portion for ease of
construction works.
Super Dordi Hydroelectric Project-Kha, 49.6MW Sep 2013
Peoples’ Hydropower Company (p) Ltd 17
Figure 2-5: Location of powerhouse area on left bank of Dordi Khola
2.4.8 Powerhouse & Tailrace A surface powerhouse has been proposed to install three units of Pelton turbines. The size of powerhouse will be
about 45m in length, 11 m in width and 10.2m in height from the plinth level with outdoor switchyard.
The tail race channel is provided having length of 96m. There will be boulder rip rap at the outlet of tailrace for
protection.
2.5 Infrastructure Facilities
There will be requirement of infrastructure facilities line access road, camp facilities, storage & godown and
construction power facilities for the project for construction and operation of the project.
2.5.1 Access Road: From Bhoteodar to Jhumswara (Chhote Khola), there is already 22 km long earthen track in operation which
needs maintenance each year after monsoon. From Chhote Khola to Power a new 3.5Km long track needs to be
opened and from PH to Headworks 11.7Km long earthen road is planned from PH to headworks crossing through
intermediate adits in Kyame Khola and Phurmu Khola.
2.5.2 Camp Facilities The project requires camping facilities including staff quarter, cafeteria/kitchen, storage godown, office building,
guest house etc for construction and operation of the project at three locations eg near powerhouse, near Kyame
area and at HW. These facilities have to be constructed before starting the project so that they can be used for
construction purpose. There is the requirement of a staff quarters near powerhouse, headworks and temporary
at the middle of alignment. Temporary facilities at intermediate places like Taje village have to be rented out
during the construction.
2.6 Metal Works
2.6.1 List of Metal works Components The project requires various metal works for steel lining at pressure shaft, gates and specials including MS sheet
supply, fabrication, erection, testing & commissioning.
The following lists of components are needed in the project and are categorized as follows.
� Supply of Mild Steel sheets for manufacturing of liner pipe for pressure shaft.
� Transportation of mild steel sheets to workshop.
� Fabrication of pipe, transportation to site, erection and testing.
� Specials in penstock like bell-mouth, manhole etc.
Dordi PH
Camp Area
Pressure Shaft
Super Dordi Hydroelectric Project-Kha, 49.6MW Sep 2013
Peoples’ Hydropower Company (p) Ltd 18
� Hydro mechanical works for gates, trash racks, stop logs, etc.
� Supply and installation of PH roof truss, entrance gate etc.
The different items are estimated for metal works totalling to 1968MT of the steel for Super Dordi Hydropower
Project- Kha.
2.6.2 Penstock Shaft liner The fabricator has to perform the following tasks for liner pipe and its bends:
� Fabrication of liner & its bends.
� De-rusting and painting.
� Transportation to site.
� Erection at site.
� X-ray/NDT tests.
Pipe material proposed for the liner is of high strength steel confirming to IS standard. Zinc rich primer and epoxy
paint with total film thickness of 250-300 micron shall be coated for corrosion protection.
2.6.3 Gates, Trash rack & Stoplogs There will be requirement of gates, trash rack and stop logs, for effective operation, control and maintenance
located at various places in the project. There as 7 different type of gates proposed for the project mostly placing
manual option for operation.
There are two Trashrack at the inlet of the project. There is requirement of stoplog to facilitate the repair and
maintenance of gates while being in operation.
2.7 Electromechanical Components
2.7.1 Turbine Three units of Pelton turbine each of 17500 kW are proposed in vertical shaft arrangement on gross head of
601.42 m and rated flow of 3.3 m3/s each having 91% efficiency. The turbine shall be provided with a complete
set of inlet valve, runner, spear valves, jet deflectors, auxiliary control equipment and other accessories.
2.7.2 Governor Under different load conditions, water flow is regulated and controlled with the help of governor. The system
shall allow speed and/or frequency control, water level control and external power control. It should also have
manual opening facilities as well as automatic system with an electronic controller and hydraulic actuator.
2.7.3 Inlet Valve Inlet valve is provided for opening and safe closure of the flow under maximum static as well as dynamic heads
including operations on sudden rejection of load and speed overrun beyond certain limit. The operating
mechanical operation shall be hydraulic with pressurized oil system provided with gravity counterweight.
2.7.4 Generator Three sets of 3-phase, 50 Hz AC, each of 19500 kVA vertical shaft synchronous generator are proposed for power
generation. The rated efficiency of the generator is considered 96%. The generators shall be possible to operate
in black start during the absence of grid
2.7.5 Step-up Transformer The power generated at 11kV level shall be delivered to 132 kV voltage level with the help of step up power
transformers. Four single phase transformers including one spear of each of 20500 kVA capacity shall be installed
in an outdoor switchyard. There will be 2 x 200kVA station supply transformers in powerhouse switchyard.
2.7.6 Outdoor Substation & Switchgears There will be outdoor substation incorporating the system for controlling and protection of the equipments. The
substation shall consists of SF6 circuit breaker in 132 kV voltage level, Isolator for disconnecting on offline mode,
Lightning Arresters , CT/ PT for measurement and control and also 2 nos of 200kVA station supply transformers
2.7.7 Protection & Control System A protection scheme with an automatic control circuit will be provided to operate machine in manual as well as
automatic operation. The control system shall isolate generator in case of fault or abnormal operation. The
following protection schemes shall be incorporated
- High voltage/low voltage, Over current, Short Circuit current, earth fault/phase unbalance
- Over temperature, low pressure
- Over/Under frequency, Reverse Power, loss of excitation,
Super Dordi Hydroelectric Project-Kha, 49.6MW Sep 2013
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- Grounding system
- Automatic Synchronising equipment
- Battery and Battery charger
2.8 Communication System
The numbers of telephone lines are proposed in the project mainly at powerhouse, one for remote control and
the other at staff quarter of the project. The area is already facilitated by CDMA phone facilities. Similarly, the
reliable communication shall be provided between powerhouse, intake and 132 kV interconnection Substation.
2.9 Transmission Line (132kV)
A 132 kV single circuit transmission line with 5.2 km in length is proposed from PH to proposed 132kV
interconnection Dordi Corridor Hub by NEA at Kirtipur. The length of the line shall be 5.2km up to Kirtipur.
Ultimately, the power shall be evacuated through Wolf conductor in this transmission line. There is 12km further
distance to Udipur substation.
2.10 Interconnection & Metering Facilities
Interconnection facilities include 132kV line bay with SF6 circuit breaker, isolators, Lightening arrestor metering
and control facilities with CT, PT and energy meter for the purpose of trading power to the 132 kV common
busbar. There will be control panels inside control room and switchgears outside in outdoor switchyard. The
Energy meter of 0.1 accoracy class shall be installed in the interconnection point
2.11 Construction Power
There is at least 12 km 11kV line needs to be constructed by the project from the nearest NEA 11 kV distribution
line for construction power. Around 750-1000 kVA load will be consumed for workshop, power transformers at
least at 5 locations with 200 kVA load and, 5 units of backup generators near Adits.
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3. CONSTRUCTION PLAN
The company has plan of implementing the project by 2014 after completing PPA and Financial closure. This
chapter describes some of the basic planning for the construction of the project.
3.1 Mode of Project Implementation
Hydropower projects can be implemented by one of the following procedures:
i. EPC (Engineering, procurement and construction) Turnkey Contract
ii. Completely BoQ based contracts with supervision from client
iii. Mixed contracts with some direct supervision, some lump sum contract, and some BoQ based
contracts supervised by clients team and backup by consultants
3.1.1 EPC Contract EPC Turnkey mode of contract is the easiest to Client as the Contractor is responsible for all activities in Lumsum
basis including design, construction, supply, erection and commissioning but it requires foreign contractors fully
capable for all works and ultimately makes project cost too high.
3.1.2 BoQ based contract The second mode of contract execution would require hiring of highly experienced construction team which and
coordination of several contractors. Not all works can be controlled in BoQ based contract which will require lots
of sub-ordinations and management efforts,
3.1.3 Mixed contract A mixed type of contract management, involves various mode of implementation contracts. Some works can be
done on direct supervision from the client (Amanat) and some can be done on BoQ based and some can be done
on Lump Sum based contract depending upon the nature and ease of contract administration.
This type of contract may be effective for Super Dordi Project. Various works can be done on different type of
contracts eg
� Infrastructure works : Direct supervision
� Civil works : BoQ based contract. ICB/LCB competitive bidding
� Metal Works : BoQ based contract after Company buy sheets
� Electromechanical : Lump Sum basis (Water to wire contract) ICB competitive bidding
� Transmission Line : BoQ based contract, LCB/ICB competitive bid
� Interconnection : BoQ based contract, LCB/ICB competitive bidding
3.2 Contract Packaging
It is essential to consider the local resources, contractor’s capability, local expertise, supervision etc to prepare
the contract packages and their scope of works so the timely completion can be ensured and cost is minimized.
For Super Dordi Hydropower Project, the following contract packages are envisaged:
Package 1: Infrastructure Works
� Access Road construction and maintenance
� Supply and installation of Bridge
� Camp facilities
� 11kV Construction power and distribution lines
Package 2 : Civil Works
� Headworks construction
� Supply and management of Blasting material
� Headrace Tunnel construction
� Surgetank and surge shaft construction
� Powerhouse and Tailrace
Package 3: Metal Works
� Supply of MS Sheet
� Transportation of Sheet to Workshop
� Penstock liner Fabrication, Errection and testing
� Fabrication and Erection of Gates, trash rack and Specials
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Package 4: Electro-Mechanical & Switchyard Equipments
� Water to Wire Electromechanical Equipment inside powerhouse
� Out door switchyard equipments
Package 5: Transmission and Interconnection facilities
� 132kV Transmission line
� Interconnection Facilities at interconnection point
For reducing costs, many small supportive works for infrastructure and supplies can be done by the company
itself as much as possible to reduce cost.
3.3 Construction Schedule
Super Dordi-Kha HEP construction shall be started by 2014 as presented on the schedule. The construction period
of the project is estimated as 36 months from the starting of the construction activities. The major activities and
milestones of the project are presented on the table below:
Table 3-1: Major milestones for implementation of the Project
SN Activities Latest Completion Target
1 License Update and application for PPA 2011 July 20th
2 Connection agreement June 2012
3 PPA Feb 2014
5 Detailed Design/ DPR Apr 2014
6 Land Procurement /lease Jun 2014
7 Generation License Jul 2012
8 Financial Closure Apr 2014
9 Staff quarters May 2014
10 Access Road Apr 2014
11 Tendering award and finalization Sep 2014
12 Contractors Mobilization Nov 2014
13 River Diversion and Headworks construction Jan 2015
14 Adit Tunnel Completion Jun 2015
15 Surgetank and Pressure Shaft May 2016
16 Headrace Tunnel Construction July 2017
17 LC Opening for Electromechanical Equipments Oct 2014
18 Machine Transportation Jan 2017
19 Installation of Machine and Finishing Works Jul 2017
20 Trial production Sep 2017
21 COD 16th
Sep 2017
Note: Milestone dates are expected progress dates only and subject to change as per progress status. \
3.4 Organization Setup
The construction setup of Super Dordi Kha HEP requires management of internal and external resources
regarding manpower and logistics for project supervision and management. There is requirement of head office
at Kathmandu and site office at Super Dordi HP Site.
An experienced technical team comprising of project engineers, supervisors and site inspectors shall be deputed
at site for construction supervision for each sites. The following organizational setup is recommended for the
construction and supervision of the project.
Super Dordi Hydroelectric Project-Kha, 49.6MW Sep 2013
Peoples’ Hydropower Company (p) Ltd 22
Figure 3-1: Organizational Setup.
3.5 Completed Achievements
3.5.1 Environmental Study
The study area does not fall on protected areas or area of importance having endangered species of any National
parks, hence there is requirement of IEE enough and has been already completed and approved by the ministry.
Although, there is no severe and adverse impact which destroys the project environment, there is identification
of some impacts and mitigation measured for the calculation of financial implications on the budgeting of the
project as per Approved IEE report.
3.5.2 Surveys and Investigations The following works are completed regarding the investigation and field works for the project for DPR:
- Detailed Topography Survey
- Connection of Survey to National Grid
- Cadastral Survey and Finding of Plots to be procured/leased for Project and Road
- Carryout Layout survey and find location of major project components
- T/L route survey and power evacuation study
- Field survey for IEE study
- Surface Geological mapping and test pits
- Construction material survey and Construction material sample Tests
General Assembly
Board of Directors
Managing Director
Project Office Head Office
Administrator
Accountant & Assistant
Project Manger
Project Engineer
Drivers/Runners
Support Staff/Helpers
Design & Support Cell (Hydropower, Geology, Civil)
Site In-charges
• Eng. Geologist
• Civil Engineer
• Mechanical Eng
Field Geologist, Surveyor,
Electrician, Mechanics
Accountant/ Store keeper
Lab In-charge & Assistants
Social-Mobilizers, Logistics
manager,
Watchman, Cook, Drivers
Resource Consultants
Finance & Legal Advisors
Super Dordi Hydroelectric Project-Kha, 49.6MW Sep 2013
Peoples’ Hydropower Company (p) Ltd 23
- Suspended Sediment Sampling and Sediment Test
- Daily Gauge reading and Discharge series
- Monthly Spot discharge measurements etc
3.5.3 Cadastral Survey and Land Acquisition There is study for finding out the plots required for the project and the land procurement has also been started
following the indication of the land required for the project, road and the camps. There is still land procurement
process is on progress.
3.5.4 Core Drilling by NEA Soil Lab There was various locations recommended for core drilling by the experts and a ToR was prepared. There were
quotations collected from various firms conducting the Core drilling works. Among them the most reliable is
considered to be NEA soil lab and the contract was made with NEA to conduct the Drilling and test on the drilling
location as well as on the core sample for further reference. Total of 125m depth is drilled and details of the test
of the core drilling are presented in Vol 4 along with submitted report by NEA, Soil Lab.
3.5.5 ERT Survey Total of 3.7km ERT survey was also conducted at the location of major structures like Powerhouse, Intake, Adits,
Surgetank, pressure shaft alignment etc for finding the lithological profile and variation on the contact between
soil and rock mass having different geophysical properties. The details of the ERT are presented in Vol 5 by
Geophysical Research and Consultancy (p) Ltd prepared by Mr Surendra Raj Panta, Engineering Geophysicists.
3.5.6 Connection Agreement The connection agreement with NEA was done and evacuation agreement was completed and the report is
updated accordingly for the schedule of power evacuation proposed at the Udipur Substation.
3.5.7 Energy Table Finalization The Deemed Energy Table presented in Feasibility study report is checked by NEA/PTD Experts, negotiated in
parameters and has been agreed with NEA/PTD with a minute signed with authorized representatives of both
parties ie Peoples Hydro and NEA for the contract Energy table. The company now is able to sell the energy as
mentioned on the contract energy table.
3.6 Further Activities in Priority
3.6.1 PPA & Generation License
The license of the company is going to be 5 years from the next month hence there is requirement of generation
license after which there is no need of updating the license company gets the authority to construct and operate
the project for 35 years.
There is also requirement of conducing the power purchase agreement to sell the energy as per contract energy
table at the interconnection point as per connection agreement. The rate is to be negotiated and agreed to sign
the PPA with NEA.
3.6.2 Financial Closure
The financial closure is must for starting the major construction activities of the project. The management of
equity and loan, agreement about the terms and condition of the loan disbursement, repayment, intereset and
charges fixation are done during the financial closure.
3.6.3 Infrastructure developments
There is requirement of construction of infrastructure facilities like access road, camping facilities and
construction power provision for starting the construction of the project. These activities shall be done from the
equity investment from the shareholders before the financing, tendering and site visit of the contractors. There is
also requirement of strengthening communication facilities covering the whole project area.
Super Dordi Hydroelectric Project-Kha, 49.6MW Sep 2013
Peoples’ Hydropower Company (p) Ltd 24
4. PROJECT COST & REVENUE
The details of updated estimate on project construction cost and the revenue from the project as per signed
energy table is presented for the reference of construction planning, equity arrangement and financial
management.
4.1 Presumptions
� The Bill of quantity (BoQ) of the project is based on quantity estimate and item rate from Rate Analysis
� The quantity estimate is based on design and drawings produced during the updated feasibility study 2013
� Rate analysis is prepared with prevalent Norms and market rates of construction material, manpower and
machines corresponding to Aug 2013.
� The material rates and manpower rates are taken from Lamjung DDC office.
� The local construction material like aggregate, stone can be managed around the project site.
� Tunnelling rate analysis is carried out based on local drill and blast technique for the excavation.
� In rate analysis an overhead of 15% is considered for surface works contracts and for tunnelling &
underground works 35% overhead has been considered based on national and international trend
� The construction will be carried out using machinery and equipment as far as possible
� There will be BOQ based contract and the contractors who undertake the works will be selected through
competitive bidding.
� The rate of machine is based on ICB contract on comparative basis on water to wire type of contract
� Physical contingency 10% for surface works, 5% for metal works and electrical works, and 15% for
underground works are added from the base cost.
� The cost estimate is made in Nepalese Rupees and 1U$= NRs. 103 conversion
4.2 Total Cost of the Project
The cost of the project is categorized on various headings for the reference of different nature of works. The rate
are taken based on 2013 Aug price level and there are provision of physical and price contingency to find the
construction from 2014. The details of the cost are presented below on Table 12.1:
Table 4-1: The summary of the project (in 000)
S.No. Particulars
Amount,
(NRs, 000) per %
1 Pre-Operating Expenses 202,248 3%
2 Civil Construction 3,174,876 43%
3 Metal Works 530,567 7%
4 Plant and Machinery 1,933,809 26%
5 Transmission line 476,245 6%
6 Land Purchased & Dev 49,272 1%
7 Site Office Building 48,667 1%
8 Office Equipment 15,000 0%
9 Vehicle 43,350 1%
10 Infrastructure Development 215,087 3%
11 Environment Metigation 98,752 1%
12 Project Sup, Engineering, Management & Operations 519,769 7%
13 Project Insurance 65,835 1%
Total without Finacing 7,373,476 100%
Cost Before Financing 148,658 NRs, 000
Cost per kW 1443.29 US$/kW
4.3 Detail of Base Construction Cost
The different headings have base cost as calculated value from the Quantity and rate, there is certain value of
contingency, the cost after contingency is applied with VAT, there is sufficient provision made on physical and
price contingency to find the construction cost before financing.
Super Dordi Hydroelectric Project-Kha, 49.6MW Sep 2013
Peoples’ Hydropower Company (p) Ltd 25
Table 4-2: The Details of Project Base cost
S. Description
Base
Cost
Contin-
gency
Contin-
gency Total Cost
VAT/
Tax
Cost with
VAT,
2013
No. in NRs % Amount in NRs in NRs in NRs
A
DEVELOPMENT, INFRASTRUCTURE
& LOGISTICS
1 Development Cost 96,588 96,588 96,588
2 Access Road 173,039 10.0% 17,304 190,343 24,745 215,087
3 Camping Facilities 39,153 10.0% 3,915 43,068 5,599 48,667
4 Vehicles 43,350 43,350 43,350
5 Land procurement and lease 49,272 49,272 49,272
6 Logistics and office equipments 15,000 15,000 15,000
Sub Total of A 416,401 21,219 437,620 30,343 467,964
B CIVIL WORKS
1 Headworks 74365 10% 7,437 81,802 10,634
2 Gravel Trap 16810 10% 1,681 18,491 2,404
3 Phrumu Collection (HW, Desander) 7397 10% 740 8,137 1,058
4
Grand Total Connecting
Tunnel & Portal 32023 15% 4,803 36,826 4,787
5
Desander & Its Adit ,
Flushing Tunnel, Portals 355369 15% 53,305 408,674 53,128
6
Grand Total Headrace Tunnel ,
Two Adits, Portals 1257130 15% 188,569 1,445,699 187,941
7
Grand Total Surge Shaft,
Its Adit & Portal 82325 15% 12,349 94,673 12,308
8
Grand Total Penstock Shaft,
Its Adit & Portals 410428 15% 61,564 471,992 61,359
9 Power House & Tailrace 190022 10% 19,002 209,024 27,173
10 River Training Structure 18013 10% 1,801 19,815 2,576
11 Switchyard 13174 10% 1,317 14,492 1,884
Sub Total of B 2,457,056 352,569 2,809,625 365,251 3,174,876
C HYDRO MECHANICAL WORKS
1
Sheet Procurement
(High Tensile strength) 166,860 8,343 175,203 4,380
2 Transporter to Factory 34,425 1,721 36,146
3
Pipe Fabrication
and Errection 188,811 9,441 198,252 25,773
4 Y-Furcations 28,265 1,413 29,678 3,858
5 Man hole 455 23 478 62
6 Linings 12,646 632 13,278 1,726
7 PH Roof Truss 4,279 214 4,493 584
8
Gates, Trashracks
& Stoplogs 30,894 1,545 32,438 4,217
Sub Total of C 466,635 5.0% 23,332 489,967 40,600 530,567
D E&M EQUIPMENTS
1
Powerhouse
Electromechanical Equipment 1,788,080 89,404 1,877,484 46937
2 LC Charge 8,940 447 9387
Sub Total of D 1,797,020 5.0% 89,851 1,886,871 46,937 1,933,809
E
TRANSMISSION &
INTERCONNECTION COST
Super Dordi Hydroelectric Project-Kha, 49.6MW Sep 2013
Peoples’ Hydropower Company (p) Ltd 26
1 Interconnection point equipment 102,176 10,218 112,394 14,611
2 132 kV T/L 233,105 23,311 256,416 33,334
3 Construction Power Provisions 47,860 4,786 52,646 6,844
Sub Total of E 383,142 10.0% 38,314 421,456 54,789 476,245
SUB-TOTAL A-E 5,520,254 525,285 6,045,539 537,921 6,583,461
F
ENGINEERING, PROJECT
MANAGEMENT & OPERATIONS 10%
1.1
Detailed Eng, Project
management & Supervision 5% 322,265 322,265
1.2
Owners Cost
(Next Cost till Financial Closure) 2% 105,660 105,660
1.3
Miscellaneous Expenses
and Price Contingency 3% 197,504 197,504
2
Environmental
Mitigation Cost (Except Land) 1.5% 98,752 98,752
4 Insurance 1.0% 65,835 65,835
Sub Total of F 12.0% 790,015 790,015
BASE CONSTRUCTION COST,2013 PRICE LEVEL 525,285 6,835,554 537,921 7,373,476
4.4 Detailed Cost calculation
The total cost of the project has been derived based on detailed items under each heading. The details of costs
included in different heading are presented below:
4.4.1 Development & Owners cost This includes investment before starting project construction on development works, promotional expense,
feasibility study, investigations, staff salary and office expenses, cost for licenses, connection agreement, PPA etc.
This preliminary cost shall be capitalized on project as asset. There is exoenses still to be incurred till Financial
closure mentioned as Owners cost.
4.4.2 Access Road The cost of road in order to facilitate the construction & supervision works, transportation of goods and machines
at various project sites from Powerhouse, Adits and up to headworks. It includes all the construction and
maintenance budget for till the completion of the project.
4.4.3 Building & Camp Houses There will be camp facility required including site office, buildings for staff quarter, godown for th construction
and operation period as well. The cost for construction of camps at 3 locations including godowns are included.
4.4.4 Vehicles The transportation of personnel, experts, goods and services needs dedicated vehicles for the project and there is
provision for procurement of Jeep, Car and motorcycle for the project
4.4.5 Land Procurement & Lease The private land has to be procured by registration pass and government land shall be acquired by leasing. There
can be temporary use of land along the alignment which shall be rented out for the construction period providing
suitable compensation
4.4.6 Logistics and Office Equipment The office shall have office facilities for construction supervision and operation of the project. Many logistics like
survey equipment, testing equipments, lab, furniture’s, Kitchen utensils, computer, photocopy, fax,
communication facilities etc.
4.4.7 Civil Works This cost includes cost for river diversion, construction of diversion weir, Intake, Gravel Trap and Desander,
Tunnel, Adits, Portals, Purmu Collection works, Surge Shaft, penstock shaft, powerhouse, tailrace and protection
works etc.
Super Dordi Hydroelectric Project-Kha, 49.6MW Sep 2013
Peoples’ Hydropower Company (p) Ltd 27
4.4.8 Metal and Hydro mechanical Works
The Metal works for penstock shaft, specials like bends, Bellmouth, Y and gates and Trashracks are included in
this group.
4.4.9 Electromechanical Equipments
There will be three units of Turbine and Generators with adequate control panels and outdoor switchgears with
132kV bus and main transformer and station supply transformer. The package includes everything from water to wire
form ICB contract.
4.4.10 Transmission and Interconnection Facilities
The power generated from Super Dordi Hydropower Project-Kha shall be evacuated through 5.2km long single
circuit 132kV Transmission line to Dordi hub located at Kirtipur of Lumjung district in Dordi Basin. Additionally,
there will be metering and protection equipment at interconnection point. There is provision of further 12km of
T/L to Udipur substation as well.
4.4.11 Engineering, Supervision, Management & Operations
The detailed engineering, construction supervision and management are envisaged in this heading. Expenses of
site office and head office with the cost of the manpower, overhead, travel, and maintenance cost shall also be
included in this heading. The cost of blasting management is also envisaged from the same heading.
4.4.12 Environmental Mitigation Works
The cost of mitigation is also estimated in the cost of the project. Presently, a lump sum cost is allocated in
percentage basis so that the cost is enough as indicated in the approved IEE study. Cost of land procurement is
separated to different heading as that belongs to non depreciable asset.
4.4.13 Miscellaneous and Price contingency
For the consideration of new items or new headings and cost increment during implementation, there is 3%
provision in cost allocated as misc budget not to let project management a matter of headache to finance such
variations.
4.4.14 Project Insurance during construction
There will be requirement of insurance for the safety of investment made by the project and contractor for their
equipments, manpower and materials. This is mandatory for the financing institutions now and is not included on
the rate analysis. So, a separate provision is made about 1% of the construction cost for Insurance.
4.5 PPA Rate & Project Revenue
A scenario was prepared with PPA rate resulting different financial indicators, which revels that Rs 6.20/unit is
required to ensure attractive IRR and acceptable sensitivity based on interest rate of twelve percent of local
banks as highest prevailing rate in the recent trend.
Table 4-3: PPA rate and resulting financial indicators
SN
Average
Rate on 2017-18
(base year)
Rate after 9th
year with
8 escalation considered
@ 3% escalation/year
IRR
B/C Ratio
ROE
Remarks
1 5.36 6.80 14.8% 1.24 22.7% Posted rate
2 5.72 7.25 15.7% 1.33 25.5% Old FSR Rate
3 6.20 7.85 16.9% 1.48 29.2% New bottomline
The revenue is expected to increase at the rate of 3 percent per year for at lest first eight years from the date of
commercial operation. The ‘Contract Energy Table’ of the project agreed and mutually signed is as follows:
Super Dordi Hydroelectric Project-Kha, 49.6MW Sep 2013
Peoples’ Hydropower Company (p) Ltd 28
Table 4-4: Signed Contract Energy Table with NEA/PTD
NEA has declared Poush-Chaitra as dry season months and Baisakh to Mangsir as wet season months. The total
Contract energy after consideration of Outages and loss @ 4% will be 289.46GWhr of which 45.36 Gwhr is dry
energy and 244.10Gwhr will be the wet energy saleable at delivery point for sales.
The project needs to generate Rs. 1794.679 millions in the first year of commercial operation. The revenue is
expected to increase at the rate of 3 percent per year for the first eight years from the date of commercial
operation. Monthly revenue generation trend is shown in following Figure 4.1. The revenue generation trend is
also varying as per discharge variation as the rate of energy has been taken as an average.
Gross Revenue Trend
0
50
100
150
200
250
Baisakh (Apr/May)
Jestha (May/Jun)
Ashadh (Jun/Jul)
Shravan (Juy/Aug)
Bhadra (Aug/Sep)
Ashwin (Sep/Oct)
Kartik (Oct/Nov)
Mangsir (Nov/Dec)
Poush (Dec/Jan)
Magh (Jan/Feb)
Falgun (Feb/Mar)
Chaitra (MarApr)
Mill
ion
s N
Rs
Figure 4-1 : Monthly Revenue Generation Trend
Super Dordi Hydroelectric Project-Kha, 49.6MW Sep 2013
Peoples’ Hydropower Company (p) Ltd 29
5. PROJECT FINANCING
Super Dordi Hydropower Project is possible to develop with finance from sound financial or lending institutions
under project financing considering PPA with NEA. Energy generated from this project shall be sold to Nepal
Electricity Authority (NEA) in mutually agreed rate for Power Purchase Agreement (PPA).
5.1 Investment & Financing Structure
The Base Cost of the Project for the year, 2013 is estimated to be NRs. 7373.476 (US $=71.587) millions. This
requires investment from equity as well as from financial institutions. A 80:20 debt equity ratio has been
proposed based on the total capitalized cost of the project including IDC. The total capitalized cost and its ratios
as equity and loan is presented in table below:
Table 5-1: Proposed Capital Structure for financing
Before Financing (NRs, 000) After Financing (NRs, 000)
Total Cost 7373476 100% Total Cost 8294041 100.0%
Cash Loan 5714646 77% Total Loan 6635211 80.0%
Equity 1658830 23% Equity 1658830 20.0%
The interest calculations are based on 12% per year for local banks and drawdown is scheduled as per
construction schedule for 3 years and Loan arrangement fee is considered as 1% of total loan at one time for the
local banks and 2% in case of others.
The financing scenario gets little different with the provision of FDI if possible for the benefit of low financing rate
like 5%. The following typical scenario is presented if the FDI is possible up to 80% of the loan in US$ then the
scenario is presented for the quick reference as follows:
Table 5-2: Typical Financing Scanario with Foreign Loan/ FDI
Financing Percentage % % of total Mil NRs Mil US$ Foreign Local
Project Cost 100% Cost 8294 82.9 59.72 23.22
Loan 80% part
Local Bank 20% 16% 1327 13.3 13.3
Foreign bank/FI 80% 64% 5308 53.1 53.1
sub-total 6635 66.4
Equity 20% part
Local Dev 60% 12% 995 10.0 10.0
Strategic Partner 40% 8% 664 6.6 6.6
sub-total 1659 16.6
Total 100% 8294 82.9 59.72 23.22
This model is proposed for a case but can be different depanding upon the availability and interest of the lender
and governing criteria required, with the control of construction by the local developers. The Financing Scanario,
drawdown of local and foreign financing components and typical financial indicators are presented in Vol 2
Financial Annex part of updated feasibility report, 2013 as Annex FDI-01.
5.2 Equity Capital
The equity investment shall be in 20% ratio in each payment during the progress of the project. The company will
arrange equity capital to initiate the project. The 20% portion is NRs. 1659 (16.1U$ ) millions as equity capital.
The equity injecting plan is as follows for the project
� Upfront Equity (Commitment 1st
year) - 10%
� Within the end of second year - 20%
� Within the end of third year - 10%
� Within the period of fourth year - 45%
� Within the period of fifth year - 15%
5.3 Loan Capital
The company needs 80% loan commercial banks which can be paid back with its interest and principal within 10
years. The loan can be considered as secured for the following reasons:
Super Dordi Hydroelectric Project-Kha, 49.6MW Sep 2013
Peoples’ Hydropower Company (p) Ltd 30
� There will not be any bad debts as NEA purchases all the energy for at least for 30 years on Pay basis.
NEA is owned by the government and has backup as an assurance.
� The level of electricity generation will be consistent for the foreseeable future as the hydrological base is
reliable
� There would be a limited O&M expenses for operation and management of hydropower project, which
is very limited for underground structure.
� There is insurance provision for loss of profit and its assets
There can be following type of loan account required for the project in long run.
5.3.1 Project Loan The company needs NRs. 5714.646 (Us$=55.48) millions as cash loan which needs disbursement within 4 years
after the project is started with major drawdown on 3 years. The interest during drawdown and construction
period shall be capitalised on the loan as Interest during construction (IDC) as cost.
5.3.2 Working Capital Loan The company requires working capital loan facility worth NRs.100 millions which will be adjusted within the limit
of the term loan approved. This working capital loan will be utilized for administration and operations of the
project as and when necessary.
5.3.3 Bridge Gap Loan The company require bridge gap loan of up to Rs. 200 millions for the construction works. This amount will be
utilized for the smooth construction process and fulfills the gap till the drawdown of term loan and between the
bill submission period and its approval.
5.4 Drawdown schedule & IDC The Project shall borrow total of NRs. 5714.646 (Us$=55.48) millions loan from the commercial banks/financial
institutions in various instalments and form of loan as per the work progress and requirement of the project. The
following assumptions are made:
� The interest rate from local bank loan is assumed to be 12% and 5% for Loan from Foreign Bank/FI
� The total main construction and disbursement period of the Project shall be 36 months.
� The interest on borrowed capital shall be capitalized and converted into investment at the end of the
project construction work.
� Loan Administration Fee is 1% at one time for Local bank and 2% for Foreign Loan
Table 5-3: Drawdown Schedule and Interest during Construction
Year
Drawdown
%
Loan
Drawdown
(Rs. million)
Total Loan
(US $.
million)
Interest for
Months to be
capitalised on Loan
(IDC)
Remarks
Year I -
- -
-
Development
works with
equity only
Year II 10% 571.465 5.548 36 Mobilization
Year III 25% 1,428.661 13.870 24
Year IV 30% 1,714.394 16.645 12
Year V 35% 2,000.126 19.419
3
Main
Construction 3
years
Total 100% 5,714.646 55.482
After drawdown, Interest during construction is estimated to maximum of Rs. 920.566 (US$ 8.94) millions ie
11.1% percent of the total project cost at the COD. There can be substantial and huge saving on the IDC
component if FDI is possible for the development of the project. The margin between Foreign Loan and Interst
rate of local bank ie about 12% currently is the main opportunity of FDI in this project. .
Super Dordi Hydroelectric Project-Kha, 49.6MW Sep 2013
Peoples’ Hydropower Company (p) Ltd 31
6. FINANCIAL PROJECTIONS
This project will start receiving monthly payments from the sales of energy. The income and expenditures, cash
flows, balance sheet, Debt service coverage ratio etc are projected till loan repayment period.
6.1 Projected Income & Expenditure A/C
There will be income from sales of electricity and the expenditures are O&M, royalties, Tax, Loan payments,
dividend etc which are reflected on Cash flow series.
Table 6-1: Projected Income Statement
Particulars/years 1 2 3 4 5 6 7 8 9 10
Income from Sales
1,784,846
1,838,391
1,891,936
1,945,482
1,999,027
2,052,572
2,106,118
2,159,663
2,213,208
2,213,208
Others Income - - - - - - - - - -
Gross Income
1,784,846
1,838,391
1,891,936
1,945,482
1,999,027
2,052,572
2,106,118
2,159,663
2,213,208
2,213,208
Less:
Operating Expenses 130,718 134,640 138,679 142,839 147,124 151,538 156,084 160,767 165,590 170,557
Interest on Bank
Loan 776,539 730,145 677,867 618,959 552,579 477,781 393,497 298,523 191,505 70,914
Royalty 36,195 37,132 38,069 39,006 39,943 40,880 41,817 42,754 43,691 43,691
Depreciation
of the Assets 274,826 274,826 274,826 274,826 288,093 288,093 288,093 288,093 288,093 300,534
Amortization - - - - - - - - - -
Penalty to NEA - - - - - - - - - -
Replacement
Repair Charge - - - - - - - - - -
Total Expenses
1,218,278
1,176,742
1,129,440
1,075,629
1,027,739 958,292 879,491 790,137 688,879 585,696
Net Profit before tax 566,568 661,649 762,496 869,852 971,288
1,094,280
1,226,627
1,369,526
1,524,330
1,627,512
Less:
Bonus to Staff
2% of Profit 11,331 13,233 15,250 17,397 19,426 21,886 24,533 27,391 30,487 32,550
Profit After
Bonus Provision 555,236 648,416 747,246 852,455 951,862
1,072,395
1,202,094
1,342,135
1,493,843
1,594,962
Tax - - - - - - - - - -
Profit aftert Tax 555,236 648,416 747,246 852,455 951,862
1,072,395
1,202,094
1,342,135
1,493,843
1,594,962
Less Dividend to
Equity Share holders 165,883 248,824 331,766 331,766 414,707 414,707 414,707 414,707 414,707 497,649
Profit For Current
Year (After Dividend) 389,353 399,591 415,480 520,689 537,154 657,687 787,387 927,428
1,079,136
1,097,313
Reserve Transfer to
Balancesheet 389,353 788,945
1,204,425
1,725,114
2,262,269
2,919,956
3,707,342
4,634,770
5,713,906
6,811,219
Rate of Dividend (%) 10 15 20 20 25 25 25 25 25 30
Equity Capital
1,658,830
1,658,830
1,658,830
1,658,830
1,658,830
1,658,830
1,658,830
1,658,830
1,658,830
1,658,830
Amount for Dividend 165,883 248,824 331,766 331,766 414,707 414,707 414,707 414,707 414,707 497,649
6.1.1 Sales
The energy generation shall very as per availability of water to the turbine and loss on transmission There is
provision of 4% plant outage and 0.54% non payable hour's (ie 48 hrs) for calculation of net energy for billing at
interconnection point as per signed energy table.
Updated Feasibility Study Report, 2013 Chapter-13: Project Financing
Peoples’ Hydropower Company (p) Ltd 32
6.1.2 Operation & Maintenance Cost
It needs regular expenses for its operation and maintenance. O&M includes salary, allowances, insurance,
meeting expenses, travelling, telephone, fuel, etc for the day to day operation of the head office as well as site
office. There should be provision made for the routine maintenance of the project.
Table 6-2: Estimated O&M for the first year of operation (In NRs, 000)
Month Staff Salary
Maintenance &
Replacements
Site &
Office Exp.
Project
Insurance Total. Rs 000
Shrawan (Juy/Aug) 1874 7000 2200 12400 23474
Bhadra (Aug/Sep) 1874 7000 2200 11074
Ashwin (Sep/Oct) 3748 7000 2200 12948
Kartik (Oct/Nov) 1874 7000 2200 11074
Mangsir (Nov/Dec) 1874 7000 2200 11074
Poush (Dec/Jan) 1874 7000 2200 11074
Magh (Jan/Feb) 1874 7000 2200 12400 23474
Falgun (Feb/Mar) 1874 7000 2200 11074
Chaitra (MarApr) 1874 7000 2200 11074
Baisakh (Apr/May) 1874 7000 2200 11074
Jestha (May/Jun) 1874 7000 2200 11074
Ashadh (Jun/Jul) 1874 7000 2200 11074
Total 24362 84000 26400 24800 159562
There is 3% increment considered each year in O&M expenses and some budget is also allocated for regular
maintenance of the project
6.1.3 Interest on Bank Loan
Interest on bank loan is calculated on the basis of loan repayment plan as monthly basis. The rate of interest is
taken as 12% maximum in case of local banks loan. Loan administration fee is considered as maximum of 2% of
loan amount for one time.
6.1.4 Royalty to Government
As per electricity policy there is capacity royalty of 100 Rs/kW/year and 2% of revenue from sales of energy to the
government for the first 15 years of operation. After 15th year the capacity royalty will be 1000 Rs/kW and 10%
tax on sales of energy according to present rules and regulations.
Based on provision of Section 11 of Electricity Act, 2049; power developer must pay the royalty to Government of
Nepal (GON) as mentioned in the following table
Table 6-3: Royalties Schedule and benefit from project for government revenue
Royalty Up to 15 years After 15 years
Annual Capacity Royalty NRs. 100/kW
Rs 49,60,000/- per year
NRs. 1000/kW
Rs 496,00,000/- per year
Annual Energy Royalty 2 % of average tariff/kWh generated Rs
312,34,797/- per year
10 % of average tariff/kWh generated
Rs. 221,320,847/- per year
Total Royalties Rs. 361,94,797/- per year Rs. 270,920,847/- per year
Note: There is 21.5% tax on income separately and 50% of the revenue has to be allocated to local level authorities around PH
by the government out of this revenue mentioned above.
- The Section 220 of Local Self Governance Act, 2055 has provision of allocation of revenue in local bodies. The
revenue generated by GON on water resources can be received by concerned District Development
Committee (DDC).
- Bases on Rule 21 of Local Self Governance Rules, 2056; 50 % of the revenue received by GON from electricity
production and sell can be allocated by concerned District Development Committee through DDC
Updated Feasibility Study Report, 2013 Chapter-13: Project Financing
Peoples’ Hydropower Company (p) Ltd 33
The revenue received by DDC can be used up in developmental activities within Village Development
Committees. The impact will be small in magnitude, regional and long term in duration and will be regular source
of income for the local bodies.
6.1.5 Depreciation of the Assets
The rate of depreciation of hydropower plant and other structure is defined in Income Tax Act, 2058. As per the
prevailing practice, the depreciation can be written off up to the valid period of PPA, i.e. 30 years. This financial
analysis assumes depreciation rate on the basis of Straight Line method covering entire period of project service
life.
6.1.6 Amortization expenses
The pre-operating expenses of the Project can be write-off up to the period of 5 years and is normal practice of
accounting as per company act but in this case all pre operating costs have been capitalized to project as assets.
6.1.7 Tax
The corporate tax rate applicable is normally 20% in hydropower sector. However, the Finance Bill 2066 allows
exemption of corporate tax for the first 10 years after generation of power. Only 10% of corporate tax rate will be
applicable for next 5 years after completion of project.
6.1.8 Dividend
Dividend to the shareholders is also proposed as per profit projection starting from the 1st year of operation @
10 to 25% even during loan repayment period based on the assumed PPA rate. There will be requirement of
timely completion of the project for expecting this dividend.
6.2 Projected Balance Sheet
The projection and distribution of assets and liability over the loan repayment period has been presented for the
first 10 year of operation.
Table 6-4: Projected Balance Sheet In Rs, 000
Sources of Fund 1 2 3 4 5 6 7 8 9 10
Shareholders Fund
Equity Share Capital 1658830 1658830 1658830 1658830 1658830 1658830 1658830 1658830 1658830 1658830
Reserve and Surplus
(From P/L) 389353 788945 1204425 1725114 2262269 2919956 3707342 4634770 5713906 6811219
Total 2048183 2447775 2863255 3383944 3921098 4578786 5366172 6293600 7372736 8470049
Loan Fund
Bank loan 6269399 5857192 5392707 4869313 4279540 3614969 2866114 2022286 1071438 0
Others Loan 0 0
Total 6269399 5857192 5392707 4869313 4279540 3614969 2866114 2022286 1071438 0
Total Liabilities 8317582 8304966 8255961 8253257 8200639 8193755 8232286 8315886 8444174 8470049
Application Of Funds
Fixed Assets 8294041 8019216 7744390 7469564 7443560 7155467 6867374 6579281 6291188 6251916
Less Depreciation 274826 274826 274826 274826 288093 288093 288093 288093 288093 300534
Net Block 8019216 7744390 7469564 7194739 7155467 6867374 6579281 6291188 6003095 5951382
Current Assets 464249 809401 1118163 1390284 1459879 1741088 2067713 2439405 2855786 3016315
Receivable 410474 422788 435102 447417 459731 472045 484359 496673 508988 508988
Cash and Bank Balance 53775 386613 683061 942868 1000148 1269043 1583354 1942732 2346799 2507328
Loan and Advances 0 0 0 0 0 0 0 0 0 0
Deposit 0 0 0 0 0 0 0 0 0 0
Less Current Liabilities 165883 248824 331766 331766 414707 414707 414707 414707 414707 497649
Current Liabilities 0 0 0 0 0 0 0 0 0 0
Provision for Divident 165883 248824 331766 331766 414707 414707 414707 414707 414707 497649
Provision for Tax 0 0 0 0 0 0 0 0 0 0
Net Working Capital
(CA-CL) 298366 560576 786397 1058518 1045172 1326381 1653005 2024697 2441079 2518666
Amortization Expenses 0 0 0 0 0 0 0 0 0 0
Updated Feasibility Study Report, 2013 Chapter-13: Project Financing
Peoples’ Hydropower Company (p) Ltd 34
Total Assets 8317582 8304966 8255961 8253257 8200639 8193755 8232286 8315886 8444174 8470049
6.3 Repayment Schedule
The company will have 80% loan which is scheduled be paid back with interest and principal within 10 years of
operation in 120 equal monthly Installments. The interest of max 12% has been considered for this project in case
of loan banks loan. The summary of the repayment schedule is presented below:
Table 6-5: Typical Loan Repayment Scenario for Local Bank Financing
(in Rs 1000)
Year
Total
Principle
Principle in
US$
Total
Interest
Interest in
US$
Principal+
Interest
Balance
Loan
Balance in
US$
1 365,813 3,552 776,539 7,539 1,142,352 6,269,399 60,868
2 412,207 4,002 730,145 7,089 1,142,352 5,857,192 56,866
3 464,485 4,510 677,867 6,581 1,142,352 5,392,707 52,356
4 523,393 5,081 618,959 6,009 1,142,352 4,869,313 47,275
5 589,773 5,726 552,579 5,365 1,142,352 4,279,540 41,549
6 664,571 6,452 477,781 4,639 1,142,352 3,614,969 35,097
7 748,855 7,270 393,497 3,820 1,142,352 2,866,114 27,826
8 843,829 8,193 298,523 2,898 1,142,352 2,022,286 19,634
9 950,847 9,232 191,505 1,859 1,142,352 1,071,438 10,402
10 1,071,438 10,402 70,914 688 1,142,352 0 0
Total 6,635,211 64,420 4,788,309 46,488 11,423,521
Note:
Project Financing scenario and analysis may be completely different for Foreign Direct Investment (FDI)
component and shall be changed as per the provision of financing institutions, lenders criteria and other
circumstances for the benefit of the project. The FDI is considered up to 80% of total loan so that the interest can
be substantially reduced for the benefit of company. Company if looking for FDI at lower interest rates like 5%
instead of 12% of local banks as indicated in the typical scenario.
6.4 Debt Service Coverage Ratio
The calculation for debt service coverage ratio is presented for analyzing the capability to payback the loan
principal and interest from the projected cash flow up to the period of loan repayment.
Table 6-6: The Debt Service Coverage Ratio for Various Years of Operation
Year 1 2 3 4 5 6 7 8 9 10
Profit After
Tax 555236 648416 747246 852455 951862 1072395 1202094 1342135 1493843 1594962
Interest 776539 730145 677867 618959 552579 477781 393497 298523 191505 70914
Depreciation 274826 274826 274826 274826 288093 288093 288093 288093 288093 300534
Amount for
loan
Repayment 1606601 1653387 1699939 1746240 1792534 1838269 1883684 1928752 1973441 1966410
Loan Principle 365813 412207 464485 523393 589773 664571 748855 843829 950847 1071438
Interest 776539 730145 677867 618959 552579 477781 393497 298523 191505 70914
Total Loan &
Principle 1142352 1142352 1142352 1142352 1142352 1142352 1142352 1142352 1142352 1142352
DSCR 1.41 1.45 1.49 1.53 1.57 1.61 1.65 1.69 1.73 1.72
The average DSCR of more than 1.5 shows enough debt service capacity of the project based on the cash flow
projections with 6.2 Rs/unit PPA rate.
Super Dordi Hydroelectric Project-Kha, 49.6MW Sep 2013
Peoples’ Hydropower Company (p) Ltd 35
7. PROJECT EVALUATION
Project evaluation is carried out in order to determine the financial indicators of the project. Different indicators
like Net Present Value (NPV), Internal Rate of Return (IRR) and Benefit Cost Ratios (B-C Ratio) etc are calculated
and sensitivities are checked.
7.1 Basic Assumptions
The major assumptions considered while preparing the financial analyses and calculating indicators are as
follows:
i. The economic life of the project is 30 years based on usual project license and PPA duration.
ii. Construction period is total of 3 years after 1 years of development period for is considered for the project.
iii. The interest rate is taken as 12% as per prevailing bank interest rate for local banks and 5% for FDI
iv. The salvage value of the project at the end of economic life is neglected. The project needs to handover back
to government hence, financially there is no value left over for the developers
v. The total cost of the project with IDC is NRs. 8294.041 (US$ 80.524) millions. This cost will be financed with
debt-equity ratio of 80 to 20.
vi. Loan and equity injection is proposed simultaneously on each payment based on construction schedule,
prospective procurements and bills.
vii. Royalty for Capacity Rs 100/KW for first 15 years and Rs 1000/kW from 16 years and revenue Royalty is 2% of
revenue for 15 years and 10% of revenue from 16 years has been applied.
viii. A total service fee and loan administration fee for arranging finance for the project is considered maximum
of 1% of loan one time.
ix. Repayment period of the loan is taken as 10 years. Equal Monthly Installment (EMI) is considered since
payment is received every month from NEA.
x. The interest during construction for the disbursement amount shall be capitalized every quarter of the fiscal
year at 12% interest rate for loal banks and considered as loan amount for the next year interest.
xi. Annual O&M cost is escalated by 3% increments each year on the basis of previous year amount.
xii. Corporate Tax is taken as 20% of net profit after 15 years but there is 100% tax holiday for 10 years and 50%
tax holiday for 5 years considered in analysis.
xiii. Rate of sale of energy is considered as Rs. 6.2 (6$ cents) per unit as a target rate.
xiv. Revenue is escalated by 3% per year for next 10 years on the basis of last year rate.
7.2 Financial Analysis
Financial analysis has been carried out to find out different indicator like present values, internal rate of return,
payback period, B/C ratios, debt service coverage ratio etc.
7.2.1 Net Present Value Net present value (NPV) is the value obtained by discounting all cash outflows and inflows of a capital investment
project by a chosen target rate of return. Net present value NRs. 2440.8 million is found which is highly positive.
It indicates that the project is financially viable and worth investing.
7.2.2 Internal Rate of Return Internal rate of return (IRR) considering cash inflows from the project over its life of 30 years is calculated as
16.9% which is more than 4% higher than the local cost of capital and shows attractive.
7.2.3 Benefit Cost Ratio /Profitability Index Benefit Cost Ratio or Profitability Index of the project is found 1.46 based on 12% discounting rate.
7.2.4 Payback Period The simple payback period of the project is found to be 5 years and discounted payback period is 8 years
considering 12% discounting rate on the capital.
7.2.5 Return of Equity (RoE) The RoE of the project is found to be 29.2 % which shows more than 25% return on investment can be ensured
for the project developers from this project even considering some reserve provisions. An average of 25% return
over the project life is a good indicator and is worth investing.
Updated Feasibility Study Report, 2013 Chapter-13: Project Financing
Peoples’ Hydropower Company (p) Ltd 36
7.2.6 Debt Service Coverage Ratio This indicates the capacity of the project and company to pay the debt on time. The cash availability after
interest, depreciation, amortization from the profit after tax is considered for repayment of the loan of the
project. An average DC ratio of 1.5is found for this project which is very good for financers.
7.2.7 Cost per unit of Electricity Generation: A simple and understandable method to evaluate the project cost and viable PPA rate is the unit cost of
electricity generation. The levellised cost of generation form the plant is found to be Rs 4.34/unit
7.3 Sensitivity Analysis
The various scenarios considered for the sensitivity analysis are:
Decrease in Sales : -5%,-10%, -15%,-29%
Project Cost Overrun : +10%,+15%, +20%,+48%
Interest Rate of Local banks : 11%,12%,13%
Change in PPA rate : 5.36, 5.72, 6.20 in average
Time of project completion : On time, delay of 1 year, Delay of 2 year
Result of analysis from the calculation for each scenario is presented below:
Table 7-1: Revenue Sensitivity result
Sales Decrease NPV, 000 Project IRR Project B/C ratio ROE
0.0% 2,480,863 16.98% 1.46 29.2%
-5.0% 2,050,257 16.18% 1.38 26.8%
-10.0% 1,619,652 15.35% 1.30 24.4%
-15.0% 1,189,047 14.49% 1.22 22.0%
-29% 0 12% 1.0 15.1%
Similarly the cost overrun are also analyzed and the following result is found
Table 7-2: Cost Sensitivity Result at 12% discount rate
Cost Increment NPV,000 Project IRR Project B/C Ratio ROE
+0% 2,480,863 16.98% 1.46 29.2%
+10.0% 1,943,585 15.63% 1.32 25.2%
+15.0% 1,674,946 15.02% 1.27 23.4%
+20.0% 1,406,307 14.45% 1.22 21.8%
+48% 0 12% 1 15.1%
Table 7-3: Interest Rate Sensitivity Result
Interest Rate NPV,000 Project IRR Project B/C Ratio ROE
11% 3,345,686 17.12% 1.60 30.6%
12% 2,480,863 16.98% 1.46 29.2%
13% 1,752,148 16.85% 1.33 27.9%
Table 7-4: Variation on PPA rate
PPA Rate NPV, 000 Project IRR B/C Ratio ROE
5.36 1,314,061 14.75% 1.24 22.7%
5.72 1,814,119 15.72% 1.33 25.5%
6.20 2,480,863 16.98% 1.46 29.2%
The following shall be scenario if there will be any delay on project construction or completion of evacuation
facilities. This can be from internal or external reasons.
Table 7-5: Effect on project completion delay
CoD Date NPV,000 Project IRR Project B/C Ratio ROE
On time
2,480,863 16.98% 1.46 29.2%
Updated Feasibility Study Report, 2013 Chapter-13: Project Financing
Peoples’ Hydropower Company (p) Ltd 37
1 year delay 2,032,083 15.0% 1.26 23.1%
2 year delay 1,183,302 13.1% 1.15 18.8%
7.4 Risks analysis
Risk associated with hydropower projects can be of several dimensions. For Super Dordi Hydropower Project-Kha
the following are presented for reference to management to take necessary action avoiding financial accidents.
Completion Time Risk: Competency and experience of local contractors in the field of civil works specially
tunneling, hydro-mechanical works and transmission line works are most important. Not only good contractor
but also good supervision and monitoring are essential for this project. Any delay in completion of the project can
adversely hit the financial projections. There is need of taking precautions for completion on time.
Hydrological Risk: The decrease in revenue or meeting deemed generation will not be the case in Dordi khola as
it is a perennial river and design discharge is in safer side although some variation can occur on the transitional
months like Jestha and Kartik depending upon early or late monsoon.
Geological Risk: In present level of investigation, there is no any severe risk reported regarding geology. There
should be adequate level of subsurface investigation and developer should not hesitate to invest a quantum of
money on geophysical and geotechnical investigations, which will ultimately pay. This risk can be mitigated by
provisioning sufficiently on time for mitigating any problems if any during construction.
Revenue Risk: This risk is mitigated by Power Purchase Agreement with NEA. The financial health of NEA has
been considered to be more improving in the coming years. As NEA is backed up by the government and there
will be take or pay PPA that should not be the case. Rather the exchange risk of the currency only is in risk. The
trend of IC and dollor rate also plays major role in case of FDI investment risk.
Social Risk: The developments on peace process and positive attitude of local peoples are the scenarios for less
social risk for investment; however the project should be developed in close cooperation with local peoples with
greater participation on ownership as much as possible from the district.
7.5 Findings and Discussion
Specific Cost is found to be around US $ 1623/kW (1 $=103NRs) with IDC.
� The IRR of 16.9%, B/C Ratio of 1.46 and Simple Payback Period of 5 years are positive indicators
from financial analysis. The other indicators are also found to be viable for implementation of the
project.
� Cash Flow indicates that there will be sufficient money to pay the debt from the first year of
operation. The average debt service coverage ratio in first 10 year of operation is found to be 1.4-
1.7 times which indicate the project can pay the debt including interest for each year up to loan
repayment period.
� In the case of sensitivities the implementation time is more sensible then other variations.
� Insurance of the project and due care on construction and supervision will be necessary and worth
investing.
� The project is found technically feasible and finically viable for construction if completed on time
Table 7-6: Financial Analysis & Sensitivities Results summary
Assumptions
1 Loan Equity Ratio (With IDC) 80 20
2 Loan repayment period (EMI basis) 12 Years
3
Construction Period / Loan
disbursement period 3 Years
4 Bank Loan Interest 12% %
5 Bank Loan arrangement Fees 2 %
7 Revenue is increase by 3% for 10 years
8 Operation & maintenance cost yearly increase by 3 %
9
Income Tax -(Holiday for 7 years- 50%
holiday for 3 years) 20 %
Updated Feasibility Study Report, 2013 Chapter-13: Project Financing
Peoples’ Hydropower Company (p) Ltd 38
10 Discount factor 12 %
11 Depreciation rate is as per Life of Project 274826 ,000
12 Machine replacement cost 3% of Machinery (Every 5 Years)
Replace Cost 1071000
Basic Data Rs,000
1 Total Project Cost (Without IDC) 7,373,476
2
Total Revenue (After Outage &
Loss ) for First year 1,784,846
3 Yearly O& M cost 130,718
4 NEA Penalty 0
5 First Year Royalty (At the stating) 36,195
6 Yearly Royalty After 15 years 270,921
Results
1 IRR 16.98% %
2 RoE 29.23% %
3 NPV 2480863 Amount
4
Cost per kW Before Financing
(1 US$=103) 1443 Amount in $
5 BC Ratio 1.46 Ratio
6 Pay back Period -Simple 4.9 Years
7 Pay back Period - Discounted 8.3 Years
8 Cost Sensitivity 48.3%
9 Revenue sensitivity 29.2%
10 Average DC Ratio 1.58 Times
11 EMI 1142352 Rs
12 Revenue Per MW in NRs 35985 ,000
13
Revenue Per MW in NRs
(After Royalty & O& M Cost) 32620 ,000
14 Cost After Financing 8294041 ,000
15 Dividend Start from first Year
Year 1 2 3 4 5 6 7
Div % 10 15 20 20 25 25 25
Revenue 1784846 1838391 1891936 1945482 1999027 2052572 2106118
Super Dordi Hydroelectric Project-Kha, 49.6MW Sep 2013
Peoples’ Hydropower Company (p) Ltd 39
8. CONCLUSION & RECOMMENDATIONS
8.1 Conclusions
♦ Super Dordi Hydropower Project-Kha is found to be a feasible project with gross head of 601.4m
and the design discharge of 9.9 m3/s(Q40) after collecting Purmu Khola discharge near the adit
as well.
♦ Financial indicators shows IRR of 16.9%, the B/C ratio 1.46, ROE of 29.2% and the project can pay
the loan and interest on 10th year even distributing dividend of 10-25% within loan repayment
period but the timely COD is necessary.
♦ The geological study has shown that there is no much geological risk associated with the project
except minor underground uncertainty which is provisioned sufficiently in the design and cost
estimates.
♦ The BOQ based contract implementation model is suggested for construction; however some
items can be carried out by company itself arranging local resources for best utilization of
resources.
♦ Delay on project construction and commission will have huge loss from both cost increment and
loss of revenue with penalty.
♦ There is financing possible at 80:20 debt equity ratios, financial projection are found supportive.
There will be attractive scenarios if the foreign loan/FDI is available at lower interest rates.
8.2 Recommendations
♦ It is recommended to conclude generation licnese and carryout the PPA so that the connection
agreement does not need to renew further.
♦ Financing is very important to ensure the completion of the project, It is worth seeking Foreign
Loan with low interest rate or FDI for the attractiveness of the project and it needs updating the
financial analysis figures also after PPA is signed.
♦ Timely implementation of the project is very essential to avoid financial crisis and accidents,
most of the projects fail because of not being able to attain the construction target, so, sufficient
provision should be made during planning and preparation works. Seeking cooperation of
Government/NEA is equally important to complete the interconnection facilities on time.
♦ Discharge measurement and development of rating curve from the gauged data have to be
continued further for both Dordi as well as Purmu Khola.
♦ There is requirement immediate action for completing all land procurement, construction of
infrastructure facilities like road, camp etc and preparation of site for the construction of the
project. These activities can be done on advance so that they are ready by the time of
contractor’s mobilization.
Super Dordi Hydroelectric Project-Kha, 49.6MW Sep 2013
Peoples’ Hydropower Company (p) Ltd 40
STATUARY DOCUMENTS & ANNEXES
Super Dordi Hydroelectric ProjectSuper Dordi Hydroelectric ProjectSuper Dordi Hydroelectric ProjectSuper Dordi Hydroelectric Project----Kha, 49.6MWKha, 49.6MWKha, 49.6MWKha, 49.6MW Nov. 2012
Peoples’ Hydropower Company (p) Ltd 41