DORDI KHOLA HYDROPOWER PROJECT

Lamjung, Nepal

Annual Progress Report

(FY 2071/72)

JuLY, 2015

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Himalayan Power Partner Limited Energy Sector Research, Development & Consulting Services

PO Box # 12538, Kathmandu, Nepal

Tel: 977 1 4002801 Fax 977-1-6217984

Email: hpphydro@gmail.comURL: www.hpp.com.np

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1 Introduction

Dordi Khola Hydropower Project is a Run-of-River type hydroelectric project with generating

capacity of 27 MW in Lamjung. The project is being developed by Himalayan Power Partner Ltd. (HPPL) Kathmandu, Nepal. HPPL is promoted by IME Group and later joined by NRN Investment Ltd. with equity sharing in 49:51 ratio.

2 Project Development Milestones

Survey License Issued : 26 May 2005

Feasibility Study Completed : December 2012

Grid Connection Agreement : 7 July 2010

IEE Approved : 4 October 2010

Generation License Obtained : 7 July 2011

PPA Signed : 15 June 2012

Detailed Project Report Completed : August 2013

Facility Agreement Signed : 7 November 2013

Construction Works Started : April 2014

Required Commercial Operation Date (RCOD) : 15 June 2017

3 Project Description

3.1 Location and Access

The whole project area lies in Chiti, Dhodeni and Bansar VDCs in Lamjung district in western

Nepal. It is connected from Kathmandu by 170 km all weather metallic roads.

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3.2 Main Project Features

Gross Head : 212.0 m

Design Discharge : 15.28 m3/sec Installed Capacity : 27.0 MW Total Annual Energy : 148.697GWh Total Annual Contract Energy : 142.319GWh

Dry Season Energy : 21.367 GWh Wet Season Energy : 120.952 GWh

Power Purchase Agreement (PPA) Rate : o Dry Season Energy : 8.40/unit o Wet Season Energy : 4.80/unit o Price Escalation : @ 3% 8 times

Water Ways

Closed Conduit/Steel pipe (2.65m) : 3237 m

Headrace Tunnel (3.3m) : 2662 m

Penstock Pipe (2.3m) : 700 m

Tailrace 330 m

Powerhouse Type : Surface

Turbine Type : Horizontal Francis (3x9 MW) Grid Connection Point : Udipur Hub Transmission Line :

Voltage Level : 132 kV Single Circuit Length : 1.2 km

3.3 Financial Indicators

Total Cost : NRs. 3,595 million

Total Capitalized Cost (Including IDC) : NRs. 4,235 million

NPV : 1,396 Million IRR : 14.35 % IRR on Equity : 18.29%

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3.4 Project Layout Map

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3.5 Construction Schedule

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4 Progress

4.1 Financial Progress

4.1.1 Funding Arrangement Facility agreement to provide Term Loan of amount NPR 3,170 million for construction of the project and working capital of amount 99 million was concluded with Bank Consortium coordinated by Prime Commercial Bank Ltd. (Lead Bank) together with Nabil Bank Ltd (Co-lead Bank), Hydropower Investment & Development Company Ltd, Civil Bank Ltd, Commerz & Trust Bank Ltd, Machhapuchhre Bank Ltd, NCC Bank Ltd and Siddhartha Development Bank Ltd. on 7 November 2013.Equity portion of NPR 1,065 million shall be collected from shareholders of the company.

4.1.2 Financial status as of July 15, 2015 Total project cost, funding arrangement and expenses/disbursement up to July 15, 2015 (FY 2071/72) including mobilization advance and advance payment to the contractors is given in following table:

Figure in NPR '000

SN Expense Categories Project Cost (DPR/FA)

Expenses up to July 15, 2015

1 Project Development Cost/Pre-construction 102,980 102,976

2 Engineering, Administration and Management 145,459 54,290

3 Preparatory Works/Access Road, Camp & Facilities 153,988 63,346

4 Civil Works (including HM Works) 2,330,262 143,543 5 Electro-mechanical Equipment 736,337 53,170 6 Transmission Line/Power Evacuation 74,126 0

7 Environmental Mitigation, Social Support and Land Acquisition

51,490 38,808

9 IDC, Fee & Commission 640,782 24,786 Total 4,235,424 480,919 Total Financial Progress 11.35 %

SN Fund Arrangement as per Facility Agreement Project Cost Expenses up to July 15, 2015

1 Consortium Bank Term Loan 75% 3,170,000 0 2 Equity investment from shareholders 25% 1,065,424 480,919

Total 4,235,424 480,919

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4.2 Physical Progress

4.2.1 Temporary project site office cum staff quarter was set up in Lamjung on January 2014.

4.2.2 Consultant Entura Hydro Tasmania (India) has completed the consulting services (contract no. 01/CS/2069/70) for "Review of the existing Feasibility Reports, Preparation of updated Detailed Project Report (suitable for appraisal of project to Bankers) and Tender Design of Dordi Khola HEP" in December 2014.

4.2.3 Consultant Entura Hydro Tasmania (India) was appointed for detailed design and construction

management on 29 March 2014. Detailed Design of Headworks completed and other works are under progress. Initial set up of consultant team for project management/monitoring is under process.

4.2.4 Land acquisition for headworks, power house and along the pipe line alignment almost completed (151ropani) by July 2015.

4.2.5 Access track up to tunnel inlet and outlet portals, along water conductor pipe/service road alignment and power house is opened, which is about 8 km.

4.2.6 Permission for procurement/import and use of explosive been received from Ministry of Home Affairs has. Agreement with Nepal Army to provide security for storage and escorting for use of explosive has been signed.

4.2.7 Contract for civil, hydro-mechanical and electro-mechanical works has been already awarded. Contract details and physical progress up to July 15,2015is tabulated as below:

NPR '000 Contract No.

Name of Contractor/Supplier

Work Description Contract Amount

Remarks

DHP/Civil/01 Rasuwa Construction Co. P. Ltd.

Access road, bridge & land development

50,835 90% works completed

DHP/Civil/02 Rasuwa Construction Co. P. Ltd / Machhapuchre Metal & Machinery P. Ltd

Headworks, Power house, water conductor & penstock

1,098,208 Contractors mobilized & started construction works

DHP/Civil/03 Eco Enfra Builders P. Ltd Tunnel & surge shaft 467,651 DHP/Civil/04 VoithHydro Pvt. L., India Supply & installation of

electro-mechanical equipment

531,698 Detail engineering works started.

DHP/Civil/05 Rex Prefab & Construction P. Ltd.

Construction of office, staff quarter & guest house

9,271 Construction of staff quarter completed.

DHP/Civil/06 Jindal Steel & Power Ltd. India

Supply of steel plates 167,358 Materials dispatched

• Contract DHP/Civil/01 for Infrastructure Works/ Service Road, Bridge and Land Development was awarded to M/s Rasuwa Construction Company on 28 March 2014. The

contract is substantially completed by 15July 2015.

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• Contract DHP/Civil/02 for Civil Works (Surface) including Hydro-mechanical Works was

awarded to M/s Rasuwa Construction Company Pvt. Ltd. in association with Machhapuchhre Metal & Machinery Works Pvt. Ltd. on 3 February 2015.The contractor has already mobilized at site. Construction of contractor's site camp completed and started works at pipe alignment and power house sites. List of equipment, materials and manpower mobilized at site is given below:

Equipment Materials Manpower 1 Excavators PC 200 - 4nos Cement Project Manager

3 Backhoe Loader JCB - 1no. Steel bars Engineers 2 nos

4 Tipper - 3 nos Support staff 15 nos

5 Tractor with tailor - 2 nos Workers/ Labours 50 nos

6 Stone crusher plant - 1 no.

7 Concrete batching plant -1 no.

8 Concrete Mixers - 2 nos

9 Drilling machine - 2 nos

10 Vibrators -4 nos

11 Double cab Pick-up - 2 nos

12 Motor cycle - 2 nos

• Contract DHP/Civil/03 for Civil Works (Underground/Tunnel) was awarded to M/s Eco-Infra

Builders Pvt. Ltd. on 29 January 2015. The contractor has already mobilized at site. The Contractor has imported two drill jumbo DH BTP2 Boomer from Germany. Contractor is preparing for portals. List of equipment, materials and manpower mobilized at site is given below:

Equipment Materials Manpower 1 Komatsu Excavator PC 200 - 1 no. Rock bolts -50 nos Project Manager 2 Backhoe Loader JCB - 1 no. Ribs -10 nos Engineer 3 Generator 25kVA - 1 no. Geologist 4 Compressor cp400 - 1 no. Support staff - 5 nos 5 Dry Shotcrete Machine - 1 no. Workers -12 nos 6 Concrete Mixer - no 6 Boomer dh BTP2 (on way to site)- 2 nos 7 Double cab pick-up - 1 no.

• Contract DHP/Civil/04 for Electro-mechanical Works was awarded to M/s VOITH India Pvt.

Ltd. on 10 April 2015. Advance payment as per agreement already released and the supplier is doing detail design works.

• Contract DHP/Civil/05 for construction of Office, staff quarter and guest house was signed with M/S Rex Prefab & Construction Pvt. Ltd., Kathmandu on 17 March 2015. Construction of staff quarter in headworks site completed. Construction of office building and guest house at

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power house site are in progress. It was scheduled to complete by July 2015 but due to earthquake it may delay by three months.

• DHP/Civil/06 Procurement/import of 3345MT steel plates required for hydro-mechanical woks from M/S Jindal Steel & Power Limited, India is finalized and Letter of Credit (LC) was opened from Nabil Bank Ltd. on 16June 2015. Materials will be dispatched from the factory by the end of July 2015

4.3 Power Evacuation: Grid connection agreement with Nepal Electricity Authority was concluded to evacuate the generated power in proposed Udipur Hub by 1.2 km 132kVA single circuit Transmission Line. The process of power evacuation is delayed due to delay in construction of Udipur Hub by NEA. Therefore, process is under way to change grid connection point from Udipur Hub to Middle Marsyangdi Switchyard at Siudibar to ensure power evacuation after completion of the project.

4.4 Effect of April-May 2015 Earthquakes

4.4.1 An earthquake of 7.8 rector scale magnitude with epicenter about 20km away from project area/Barpak, Gorkha was occurred on 25th April 2015 and 7.3 rector scale major aftershock on 12 May 2015. The Project Team visited the site after both main and aftershocks. Findings of the Team are as follows:

• There is no physical damage seen in civil works/ office building and bridge. Slight effect is seen in service roads and erection of concrete batching and crusher plants which shall be rectified soon after remobilization of manpower.

• Project site has been shifted/moved slightly horizontally and vertically. Due to the shift, whole project area is under re-survey and design/drawing shall be reviewed after completion of survey works. Stability and safety of the structures shall also be reviewed considering the effect of recent earthquakes.

• The Project may delay up to six months due to earthquake and design/drawings review.

4.4.2 The Consultant has reviewed the survey data and submitted revised drawing of headworks

and water conductor pipe. There are minor changes in water conductor pipe but has strongly recommended shifting of weir by 100m to upstream of Pagi Khola as suggested earlier in DPR.

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5 Project Organization Chart

Dordi Khola Hydropower Project

Project Director

Mr. Guru P. Dhakal

Project Manager

Mr. Munna Shakya

Headwork/ WCP

Mr. Deepak Gyawali Civil Engineer

Junior Engineer (2)

Bio-Engineering Unit

Mr. J.N. Adhikari

HRT

Mr. RC Paudel

Civil Engineer

Junior Engineer (2)

Powerhouse

Mr. Roshan Ghimire

Civil Engineer

Mechanical Engineer (1)

Electrical Engineer (1)

Junior Engineer (3)

Laboratory Incharge Mr. Chaturbhuj Dhakal

Jr. Engineer

Laboratory Technician (1)

Laboratory Boy (1)

Admin/ Finance

Binaya KC

Umesh Basnet

Accountant (1)

Store keeper (1)

Support staff (20)

(driver, watchmen, office assistants)

Detailed Design/Monitoring/ QA

Consultant: Entura Hydro Tasmania

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6 Logistic Support

Himalayan power partner Ltd. owns following vehicles, computers and equipment:

6.1 Vehicle

SN Type No. Remarks

1 Nissan Jeep / Station Wagon 1 HO/Kathmandu

2 Maruti Wagon R 1

3 Nissan Double Cab Pick-up 1 Site/ Lamjung 4 Bolero Double Cab Pick-up 1

5 Yamaha Gladiator Motor Cycle 125 cc 1

6.2 Computers & Equipment

SN Type No. Remarks

1 Desk top 6 HO/Kathmandu 2 Laptop 4

3 Printer/scanner/photo copy 4

4 Projector 1

5 Air-conditioner 1

5 Desk top 1 Site/ Lamjung 6 Laptop 1

7 Printer/scanner/photocopy 1

8 Current meter 1

9 TV 32'' & 24'' 2

10 Refrigerator 1

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Photographs

Temporaryproject Office/Staff quarter, Near Power house

staff quarter& Site Office cum Laboratory at Headworks

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Contract No. DHP/Civil/01 (Infrastructure Works, Rasuwa Construction co.)

Road to Surge shaft/Tunnel outlet Portel

Dordi Khola Bridge Construction

Dordi Khola Bridge Construction

Land development at headworks

Dordi Khola Bridge Construction

track from hw along Service road/pipe alignment

Dordi Khola Bridge Construction

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Contract Package No. DHP/Civil/02(Civil Works, Rasuwa Construction Co.)

Service Road/WCP Alignment Work Excavation at powerhouse site

Crusher Plant Installation at headworks Batching Plant Installation At headworks

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Contract Package No. DHP/Civil/03(Tunnel Works, Eco-infra builders)

Inlet Portal Outlet Portal

Boomer DH BTP2 Labour Camp

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