As Nepal desperately needs a storage hydropower project to maintain the power supply during the peaking time, the recent announcement of contract awards of Tanahu Hydropower is a matter of great importance in the energy sector. The completion of the project will be a game changer.

Although the project was delayed for almost a couple of years due to various technical and other reasons, the signing of the agreement with two companies for major construction work was a major breakthrough.

As per his commitment to generate more power and complete the projects in schedule, NEA’s managing director Kul Man Ghising’s effort seems to be working recently.

As per the international bidding rules, Tanahu Hydropower Ltd selected Italian based Cooperative Muratori & Cementisti (CMC) for head works construction of 140 MW Tanahu Hydro Power project. CMC was the lowest bidder of 20.65 billion Portion of the first lot which includes dam construction and river diversion.

Although it has completed the Melamchi Tunnel, Italian Company CMC’s recent performance in the project has raised many questions. However, it found the contract as a lowest bidder.

China based Sinohydro Corporation Limited secured the contract award of Powerhouse, Waterway and Related Equipment. This contract is over 110.4 million dollar, which is the lowest bidding.

According to a press release issued by the company, the company called both the parties on 23 July to come to sign the purchase agreement with performance guarantee. Both have collected the letter on 24 July.

“Both the companies have to sign the contract agreement within 28 days of receiving the letter,” said Pradeep Kumar Thike, Managing Director of Tanahu Hydropower Ltd. “They have to start the work two months after the agreement. Our target is to complete the project by December 2023.”

Having long experiences of working in the project construction, this is a major achievement in the career of Managing Director Thike, who also worked as deputy manager in Upper Tamakosi.

So far as the third package of construction of Damauli- Bharatpur 220 Kilometer Double Circuit Transmission line is concerned, the company has already made public the tender notice on July 12.

Out of five companies pre-qualified for the first package, 3 companies submitted the tender. Out of 3 companies pre-qualified for the tender, only two companies submitted the tender for second package.

The total estimated cost of the project is US$ 505 which will also be spent in Transmission line and rural electrification. Asian Development Bank will contribute US$ 150 million, JICAUS$ 184 million, European Investment Bank 85 million dollars as a loan and Nepal Government and NEA will invest 87 million dollar.

For the funding the agreement has already been signed between the government, NEA and development partners.

Established in 2012,Tanahu Hydropower Limited (THL) is a subsidiary company of Nepal Electricity Authority(NEA) to develop 140 MW Tanahu Hydropower Project ("the Project") (formerly, Upper Seti Hydropower Project). Situated 150 km west of Kathmandu on Seti River near Damauli, the Project is the storage type hydropower project with the capacity of 140MW with an estimated average annual energy generation of 587.7 GWh (Years 1-10) and 489.9 GWh (Year 11 onwards). The estimated cost of the Project is US$ 505 million.

According to the website of Tanahu Hydro, the main components of the Project are 140 m high concrete gravity dam with crest length of 175m on the Seti River and reservoir with a total surface area of 7.26 km2. The waterway consists of 7.4m diameter and 1,203m long headrace tunnel on the right bank for the river.

An underground powerhouse measuring 27m wide x 46m high x 97m long will be built approximately 6 km (along the river course) downstream of the dam site. A 190m long tailrace tunnel will discharge the tail water back into the Seti River.

The reservoir will extend about 25 km upstream inundating the low-lying lands (415 m) along the Seti River. The Project will also include Rural Electrification (RE) and Transmission Lines (TL) component. A new 220 kV double circuits Transmission Line will evacuate the generated power to the new Bharatpur Substation. The length of the transmission line corridor is 37 km.

THL signed the contract agreement with M/S Lahmeyer International in association with Manitoba Hydro, International, Canada (“the Consultant”) as Project Supervision Consultant (PSC) on June 29, 2015. The contract period of PSC is twelve years.