October 08, 2008

GMR Energy bags 300 MW hydropower project in Nepal

BL reported that GMR Energy has outbid rival Jindal Steel & Power Limited to bag a 300 MW hydropower project in Nepal after it agreed to give 12% free electricity from the project to Nepal. An official of GMR Energy said that “It has bagged the Upper Karnali project and a MoU to this effect was signed recently.”

The official said that “The Nepal government was asking for 33% equity in the project and has now agreed for 27%.” He added that GMR would offer close to 36 MW free power from the 300 MW project to Nepal.

While permitting foreign investment from Indian companies in the hydropower sector, Nepal had decided to award the projects to developer who offers the maximum free power to the country. It also decided to give only 1 project to a company. Nepal is seeking 124 MW free power from the 2 projects.

It is noted that GMR Energy, a 100% subsidiary of GMR Infrastructure, was a front runner for Upper Karnali and 402 MW Arun III project. However, it lagged behind Jindal Steel & Power after the Nepal government changed parameters for awarding the projects early this month.