Hydroelectric Investment and Development Company ( HIDC ) plans to start operations on July 30, one year after it was established. The deck has been cleared for HIDC to go into business after Nepal Rastra Bank ( NRB ) approved its treasury and investment policy, financial source management policy, loan investment policy and good governance policy.
Formed with the objective of investing in hydropower projects with a capacity of more than 25 MW, HIDC will, in the initial stages, make investments with a consortium of banks. “As we don’t have experience and expertise to find the right project to invest in, we decided to invest in partnership with banks,” said Ejendra Prasad Luitel, coordinator of the the company’s management team. ” NRB has also told us to start by investing in projects determined to be viable by banks.” Being a member bank, it will invest less than the leading bank.
HIDC has written to different banks informing them about its intention to invest in power projects and asking them to send the names of projects they are planning to invest in.
“Banks have responded positively as the involvement of a government-owned company gives more credibility to their venture,” he said. HIDC will invest at least Rs 250 million in one project having a capacity of more than 25 MW. However, it has not fixed the investment target for next year. The company possesses funds amounting to Rs 6.7 billion, most of which has been deposited in commercial banks.
Luitel said that though HIDC would initially make investments by joining a consortium of banks, the central bank has not prevented it from investing unilaterally in the future. As per the Treasury and Investment Policy, HIDC can invest in any hydropower project provided its promoters have invested at least 20 percent of its paid-up capital or 25 percent of the total capital. “The company can only invest up to 20 percent of its paid-up capital in a project,” said Luitel.
HIDC is yet to appoint its chief executive officer and other employees. Presently, a three-member management team led by Luitel, who is also a director of NRB , has been operating the company. Its staff are on deputation from various ministries.
Meanwhile, the CEO appointment process in public enterprises has stalled after the Election Commission implemented the code of conduct barring the Public Enterprises Board from selecting candidates for the top posts in state-owned undertakings including HIDC .
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, but the EPF and the CIT have so far put in Rs 300 million each and RBS has invested Rs 400 million.
