Nepal picks China over India on hydopower deal

Nepal and China have sealed the deal on the West Seti Hydropower Project in West Nepal.

"The government of Nepal has granted permission to China Three Gorges Corporation to proceed on the 750 MW West Seti Hydropower Project on the Seti river in Dadeldhura district," a letter by the goverment of Nepal announced.

The US $1.6 billion project is the biggest foreign investment project in Nepal.

Work on the project is scheduled to start this year and will be completed by 2020.

The project was earlier designed to supply electricity to India, but it will now be meeting Nepal's own

domestic requirements with the surplus being sold to China.

"The WSHP initially designed to export electricity to India, is now aimed at meeting the growing energy demand of Nepal," according to the communication by teh Nepalese goverment.

The project was first awarded to an Australian company - Snowy Mountain Engineering Corporation - in 1997. On completion, the project was supposed to sell electricity to India. But it never took off. Last year, the Nepal government scrapped the contract and started discussions with China.

India has dominated the hydropower sector in Nepal so far, but several of its projects have been stalled because of various reasons such as protests from Maoists against awarding deals to foreign companies.

For more.