KATHMANDU, OCT 15 –
Hydroelectric Investment and Development Company ( HIDC ) has decided to invest in the Dhalkebar-Muzaffarpur cross-border transmission line by acquiring a 14 percent stake in Power Transmission Company Nepal Limited (PTCNL) which will build the Nepali portion of the project.
PTCNL was formed three months ago to build a 400 KV transmission line of 140 km length linking Dhalkebar-Muzaffarpur from the Nepali side. The Nepal Electricity Authority (NEA) owns 64 percent of PTCNL while Power Grid Corporation and IL&FS Energy of India will acquire 26 and 10 percent of the company respectively.
A parallel company, Cross-Border Power Transmission Company Limited (CPTCL), has been set up in India to manage the development of the transmission line. The NEA also holds a 10 percent stake in CPTCL.
“ HIDC will purchase 14 percent of the 64 percent owned by the NEA to develop the transmission line,” said Ejendra Prasad Luitel, coordinator of the company’s management team. The NEA had asked the company to invest in the transmission line after PTCNL was formed. Another official said that the investment would benefit the company as it would receive a 15.5 percent return on equity.
The government established HIDC to fund large hydel projects and accelerate hydropower development in the country as lack of financial resources had been one of the major stumbling blocks.
“The NEA is ready to offer 14 percent of the stock to HIDC to raise cash,” said an NEA source. As per the shareholder structural provision, the NEA is permitted to offer 14 percent out of its shares to any bank or financial institution (BFIs). “As HIDC was established to finance hydropower projects, it is an eligible institution to buy equity,” the source added.
Luitel said that HIDC had asked the NEA to send the necessary documents related to the development of the transmission line. HIDC officials said that they would sign an official memorandum of understanding (MoU) with the NEA after studying the documents.
HIDC has Rs 7.5 billion collected as share investment from its share holding authorities. It has deposited most of the funds collected from its promoters in banks with the aim of earning interest while the company prepares to go into business.
A cabinet meeting on July 6, 2011 had decided to allocate Rs 5 billion for the company by obtaining Rs 2 billion each from the Energy and Finance ministries and Rs 1 billion from the Law Ministry. The Employees Provident Fund (EPF), Citizens Investment Trust (CIT) and Rastriya Beema Sansthan had pledged share investments of Rs 1 billion each to take the promoters’ stake in the company to Rs 8 billion, according to officials. The company, whose paid-up capital is Rs 10 billion, will issue ordinary shares worth Rs 2 billion.
The Dhalkebar-Muzaffarpur transmission line will facilitate power trade between Nepal and India. The cost of the of 45-km Nepali portion of the project is Rs 2.263 billion, while the Indian portion of 100 km will cost Rs 2.352 billion.
Source : The Kathmandu Post