According to Reuters news reports from Kathmandu, a power purchase agreement (PPA) worth some US$850M has been signed between representatives of the Power Trading Corporation of India (PTC) and Australia’s Snowy Mountain Engineering Corporation (SMEC), the developer of the plant.

The PPA for West Seti, which on completion will be the largest hydroelectric plant in Nepal, is to last for a reported 30 year period.

Lekhman Singh Bhandari, director general of Nepal’s Electricity Development Department told Reuters that all the power generated at West Seti would be exported to India. SMEC would also build a new facility to supply power to Nepal, added Bhandari.

The project has been in the pipeline since 1996 and a memorandum of understanding between SMEC and PTC was signed in October 2002.

Construction at the planned sites in Doti, Achham and Bajhang districts in the west of Nepal, is to begin in 2004 with work expected to be completed within five years.