Korea South-East Power Signs Contract on UT-1 Hydroelectric Power Plant in Nepal

Korea South-East Power Co.(KOEN) announced on January 2 that the company recently signed a project development agreement on Nepal’s Upper Trishuli-1 Hydroelectric Power Plant which the Nepalese government and Korea South-East Power are participating in as major shareholders.

The government-guaranteed deal struck this time is the first contract of the Nepal government to guarantee the payment of electric bills in US dollars by the power purchase entity (Nepal Electricity Authority). The contract also includes provisions to reduce business risks of project operators and creditors of the international financial sector such as various tax breaks.

This is quite meaningful in that Korea South-East Power sealed the deal after overcoming political unrests such as a 7.8 magnitude earthquake and fluctuations in prices of oil and materials provoked by the closedown of the border by India after the start of project development in 2012.

With the completion of the government-guaranteed contract, the core of the project, Korea South-East Power is planning to conclude a power purchase contract with the Nepal Electricity Authority and a financial contract with creditors with the aim of breaking ground in October 2017.

On the other hand, Korea South-East Power is joining forces with IFC (International Finance Corporation), Daelim Industrial Co. and Kyeryong Construction Industrial Co. to carry out the Upper Trishuli-1 project to build a 216MW hydroelectric power plant about 70km north of Kathmandu, the capital of Nepal. .