SMEC Developments Pty Ltd, a member of the SMEC Group from Australia, is the promoter of the West Seti hydroelectric project.

SMEC has a long and distinguished record in the design of major hydropower projects having its origins in Australia’s Snowy Mountains Scheme, one of the civil engineering wonders of the modern world.

Built between 1949 and 1974, the purpose of the Scheme was to divert the rivers of south eastern Australia towards the west to provide water for irrigation and to generate peak load electricity for the states of New South Wales and Victoria.

The Snowy Scheme created sixteen dams, seven power stations generating 3756 MW and one pumping station, over 144 kilometres of tunnels, 80 kilometres of aqueducts and 1000 kilometres of roads.

SMEC was created in 1970 as a Government-owned business to capture the expertise associated with the Snowy Scheme. SMEC was privatised in 1993 and is now owned by its staff.

SMEC has a long and continuous history of involvement in Nepal beginning in the mid -1960’s, including the following projects:

• The first study of the Karnali (Chisapani) Project: 1968.
• Gandaki River Basin Study (Central Nepal); 1977 – 1979
• Marsyandi Hydroelectric Project; 1978 – 1982 and 1986 – 1990
• Greater Kathmandu Drainage Master Plan Study; 1989 – 1990
• Greater Kathmandu Water Supply Project (Melamchi); 1990 – 1992
• Project Formation Report for District Road; 1991
• Flood Damage Assessment Project: 1993
• Design and Supervision of Mechanical Training Programme, Department of Roads: 1995 - 1998
• Road Maintenance and Rehabilitation Project: 1995 - 1999
• Road Maintenance and Development Project: 1998 - 2005
• West Seti Hydroelectric Project: 1994 to date

Background to the West Seti Hydro Project

1981-1997

• 1981:   37 MW run-of- river scheme proposed with dam site 8 km upstream of the present site (Sogreah Study).
• 1987:   identification of a 360 MW (2,400 GWh) storage scheme at the current site (Sogreah).
• 7 July 1994:   MoU signed between SMEC and the Government of Nepal (GoN) Electricity Development Centre (now the Department of Electricity Development) for development of the West Seti Project.
• March 1995:   360 MW scheme determined as too small to attract international support as an export project supplying baseload power to India.

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1997- Current

• 11 May 1997:   Export Agreement signed between the Government of Nepal (GoN) and WSH
• 27 June 1997:   Project Agreement signed between GoN and WSH to build a 750 MW scheme.
• 4 December 1997:   Asian Development Bank (ADB) expert report to GoN recommends that the GoN takes 10% revenue share in lieu of ‘free energy.’
• December 1997:   Detailed Engineering Report (DER) completed by SMEC International Pty Ltd (SI) and submitted to the GoN.
• 11 December 1998:   Amendment 1 to the Project Agreement confirms GoN decision to take the 10% revenue share option of the Project Agreement.
• January 1999:   GoN approves the DER.
• August 1999:   Environmental Impact Assessment (EIA) completed by SI and submitted to GoN.
• 1999:   Power Trading Corporation of India Ltd. (latterly PTC (India) Ltd.) formed by the GoI to facilitate power purchasing from private suppliers.  PTC also mandated to undertake cross- border trading.
• October 2000:   GoN approves the EIA.
• December 2000:   GoI instructs PTC to commence negotiating a Power Purchase Agreement with WSH.
• 2001 – 2002:   On-going negotiations in Thailand, India and Europe with construction contractors, energy off- takers and equity investors.
• 23 March 2003:  SMEC signs MoA with GoN’s MoWR to provide, from a second project, 10% “free power” in lieu of West Seti revenue share.
• 3 October 2003:   Power Purchase Agreement initialed with PTC.
• 17 May 2004:   WSH signs MoA with the China National Machinery and Equipment Import and Export Corporation (CMEC) to negotiate a construction contract
• December 2004:   after a study of six potential sites nominated by GoN in the Gandhak Basin for a second project for the provision of “free power”, SMEC advises GoN of the selection of the Upper Seti project.
• 13 April 2005:   Plant Design Build Contract (PDB) signed with CMEC.
• March 2006:   WSH agrees to offer Power Debentures to Nepalese Financial Institutions (NFIs).
• 7 April 2006:   MOU signed between SMEC Holdings Ltd. and the Asian Development Bank (ADB) for the participation of the ADB in the project.
• 24 April 2006:   WSH sign mandate letter with the ADB.
• October 2006:   Sinosure of China agrees in principle to provide US$400 million of Political Risk Insurance for the Project.
• November 2006:   three Chinese banks, the China EXIM Bank, the Industrial and Commercial Bank and Bank of China, provide Letters of Interest to fund US$900 million of debt for the project.
• May 2007:   GoN agrees to take a 15% equity stake in the project, to be funded by a loan from the ADB.
• 15 May 2007:   first meeting of prospective WSH shareholders – SMEC, GoN, ADB, CMEC, IL&FS of India and NIBL representing the NFIs.
• 21 May 2007:   transmission line tender documents issued to five potential contractors.
• 5 July 2007:  Summary EIA submitted to the ADB.
• 6 July 2007:   second meeting of prospective WSH shareholders in Kathmandu.
• 31 July 2007:   transmission line tender bids received.
• 21 August 2007:  Summary EIA posted on the ADB web-site.

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