Mr. B. R. Regmi, Project Manager, Medium Project Development Department, Engineering Directorate, Nepal Electricity Authority, Durbar Marga, Kathmandu, Nepal, Tel: 977-1-225499; Fax: 977-1-227035

99 -- NEPAL: S67000 INVITATION FOR CO-FINANCING FOR DEVELOPMENT OF UPPER MODI HYDROPOWER PROJECT POC Tel NO. 977-1-225499. Nepal Electricity Authority (nea) has decided to develop and operate upper modi hydropower Project within three years in order to meet the present power demand in Nepal nea invites proposals from interested local and foreign investors to participate as a CO-financier for the Development and implementation of the Project the Project can be developed as private/Public or joint venture company with nea the nea established under nea act 1984 is an undertaking of his majesty's government of Nepal (hmg) nea is responsible for generation, transmission and distribution of Electricity in the Kingdom of Nepal the feasibility study of upper modi hydropower Project was carried out by nea in 1994 nea has already applied for license to conduct detailed Engineering study of the Project the salient features of the Project are a) location: near birethanti, kaski district (40 km from pokhara at pokhara baglung highway); B) rated power 14 mw; C) design discharge 17 cumecs; D) tunnel length: 3.3 km; e) net head 94 M; F) average annual energy: 84 kwh; G) estimated Project cost (civil, electro-mechanical, land acquisition, camp facilities, access road, idc, excluding transmission line) 27.87 million US dol. (1994); H) present status: feasibility study completed in 1994; and I) power purchase rate rs. 3.00/kwh, 1995/96 price (approx equivalent to US dol. 0.06). Interested investors must submit the financial proposal with terms and conditions for the CO-financing of the Project they also must submit their financial status with auditor's certified balance sheet the main volume of feasibility study May be purchased by interested investor upon payment of non-refundable fee of rs 5,000.00 or US dol. 100.00 only by Bank voucher or Bank draft drawn in favor of nea account no bai.A.46 at Nepal rastra Bank, thapathali all generated power shall be purchased by Nepal Electricity Authority power shall be purchased at the powerhouse annual escalation rate on purchase price is 3 0 percent for 18 years including construction period transmission line from the powerhouse to the nearest nea grid shall be constructed by nea to evacuate the power royalties - the developers shall pay the prevailing royalty charges, which is as follow at present I) rs 100.00 (US dol. 0.02) for 15 years and thereafter rs 1000.00 (US dol. 20.00) per year per installed kilowatt capacity II) 2 (two) percent for 15 years and thereafter 10 (ten) percent of the total energy charge per year income tax; income tax shall be paid by the developer as per the prevailing hmg's Electricity act which is as follow at present I) no income tax for 15 years from the Commercial operation date II) after 15 years, ten percent less than the present corporate tax which is 35 - 10 percent - 25 percent net- license period shall be maximum up to 50 years foreign currency repatriation as per hmg's regulations, in case foreign currency has been invested in the generation, transmission or distribution of hydroelectricity as a loan or share capital, hmg shall make available necessary foreign currency at the prevailing market kite of foreign exchange for repatriation of investment or repayment of principal or interest of loan proposals must be delivered to nea at the below contact address on or before 1700 Mrs Nepal standard time on August 31, 1995 nea will not be responsible for any cost or expenses incurred by the applicant in connection with the preparation or delivery of the proposals nea reserves the right to accept or reject any proposal and to cancel this process and reject all proposals without assigning any reas ons whatsoever further information May be obtained during office hours at the following office Medium projects Development Department Engineering Directorate Nepal Electricity Authority Durbar Marga, Kathmandu Nepal Fax no 977-1-227035 proposal deadline 083195; 5:00 P.M. (local time) Please send a copy of your response to: Commercial Section (TOP), American Embassy, Kathmandu, Dept of State, Washington DC 20521 6190, Refer to T0004.. (0200)

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