KATHMANDU, Jan 1
BPC has sold its majority share in Kabeli Energy, that is constructing 37.5 MW Kabeli A Hydropower Project, even before the project is completed and is now limited to just 26 percent of shares. InfraCo will have more role to play in the project as per the new investment structure. Not even the civil work of the project has been started even though it was scheduled to be completed by the end of 2015. BPC has not revealed the reasons for selling its stake. A BPC official revealed that the agreement for transfer of shares was done only a few months ago and said that the amount of transactions has been kept secret. “We are now in minority after selling the majority shares of Kabeli. Even the staffers have not been informed about selling of shares,” the staffer added.
BPC, that had taken license by forming a group when the Energy Ministry had invited bids, has sold the majority shares even before the project has been started. BPC had showed Shangrila Energy Limited, SCP Hydro Energy International (CANADA), Asia Pacific Power Tech (China), and Khudi Hydropower Limited as joint investors when the ministry had invited bids in January, 2005. The companies of China and Canada are not included in the new investment structure.
The project is taking soft loan of US$ 40 million (around Rs 4 billion) at 4 percent interest rate from the International Finance Corporation (IFC) under the World Bank on the government’s guarantee. The government had provided guarantee due to the majority stake of BPC in the project. The loan for the project will be mobilized through the Hydropower Investment and Development Company. The investment structure has been changed to 60 percent of dollars and 40 percent of rupees. It was 57 percent of dollars and 43 percent of rupees earlier.
The government had handed over the project to BPC’s group as it had proposed to sell electricity to the Nepal Electricity Authority (NEA) at the lowest rate. NEA and Kabeli have done Power Purchase Agreement (PPA) at Rs 4.48 per unit. The ministry and Kabeli had signed Project Development Agreement (PDA) in February, 2010. The project is of peaking run of the river type. It can generate electricity at full capacity for four hours in the morning and two hours in the evening. It will generate 201 million units of electricity a year, as per a study.
The company must hand over 50 percent ownership of the project, to be built in the Build-Own-Operate-Transfer (BOOT) model, to NEA after 25 years of starting generation and full ownership to the government at an operational state after 35 years, according to the PDA. The dam of the project and 24 kilometers of access road to the project site have already been constructed with 20 percent of the company’s own capital. Though the project was set to be completed at a cost of Rs 5 billion (US$ 78 million at the then exchange rate), the cost has now risen to US$ 100 million due to the delay. The promoter will have 20 percent of equity share, IFC will provide 32 percent in loan and local commercial banks will provide another eight percent of loan for the project to be constructed in Taplejung district.
Source : Baburam Khadka / Karobar Daily