Hydroelectric Investment and Development Company (HIDC) has got off to a running start by holding talks with commercial banks on the possibility of joining them as a consortium partner. The central bank has allowed HIDC to finance hydropower projects identified by banks as a consortium partner initially while it gains technical expertise.
The government-owned company has been in talks with a number of commercial banks planning to finance hydropower projects after they asked if it wanted to join them.
“We are talking with Nabil Bank out of the four banks that approached us with potential projects,” said Ejendra Prasad Luitel, management coordinator of HIDC. “Himalayan Bank, Prime and Laxmi have sent us the names of the projects, but they have not provided any details.”
According to HIDC, Nabil has proposed financing the 42 MW Mristi Khola Hydropower Project located in Myagdi district. HIDC and Nabil have held two rounds of talks over the project.
After finding the project to be attractive, the HIDC board has decided to invite Nabil and the developers of the project to give a presentation this week. The rate of the power purchase agreement signed with the Nepal Electricity Authority is Rs 5.40 per unit which HIDC has found attractive.
A senior Nabil official who wanted to remain unnamed said they were at the initial phase of discussions. “It is, however, good that an institution focused on hydropower development is ready to finance projects initiated by us,” said the Nabil official.
HIDC officials said it would also look at financing other projects after the other banks provide the details. According to them, Himalayan Bank has proposed the 42.9 MW Anku Khola while Prime Bank has proposed the 25 MW Khani Khola I whose capacity is being enhanced to 40 MW. Laxmi has proposed two projects, 23.5 MW Upper Solu and 2.6 MW Shisa Khola. HIDC had asked seven commercial banks and two development banks to recommend projects above 25 MW in which it could invest as a consortium partner.
Meanwhile, an HIDC official said that financing the project proposed by Laxmi Bank was not possible as it was below 25 MW. As per its memorandum of association, it can only finance projects above 25 MW.
Established a year ago, HIDC possesses funds in the amount of Rs 6.7 billion obtained by various ministries and other government agencies. The company intends to generate resources from bilateral and multilateral donor agencies and other international organisations besides issuing debentures and bonds in the domestic market. It has a paid-up capital of Rs 8 billion, issued capital of Rs 10 billion and authorised capital of Rs 50 billion.
Source : Ekantipur