As per its new provision, the company will lend up to Rs 200 million for medium-sized projects under the consortium model.
Established by the government to fund large hydel projects and accelerate hydropower development, HIDCL was initially mandated to finance projects above 25MW and transmission and distribution lines as a consortium partner with commercial banks.
The HIDCL made the new plan public during its first annual general meeting (AGM) held here on Friday. “The decision has been to fulfill the financial need of medium-sized private sector projects as financial access has been one of the major challenges to developers to accomplish projects on time,” said HIDCL CEO Deepak Rauniyar. Rauniyar also said HIDCL will begin financing projects once applicants fulfill the set criteria.
As most of the projects being developed by Nepali developers are below 25MW, questions were raised over HIDCL ’s previous decision to maintain the investment threshold at 25MW.
Independent Power Producers (IPPs) have welcomed the HIDCL move, saying it will help Nepali developers who are facing fund crunch. The IPPs had been demanding the company finance all private sector projects irrespective of their size.
“Given the lack of resources, the decision to finance projects above 15MW is a welcome move,” said Subarna Das Shrestha, president of the Independent Power Producers’ Association – Nepal. He urged the HIDCL to lend in relatively lower interest rates than the existing bank rates.
So far, the HIDCL has announced financing the 42MW Mistri Khola Hydropower Project as its first venture in a consortium of commercial banks led by Nabil Bank. It has also decided to invest in the Dhalkebar-Muzaffarpur cross-border transmission line by acquiring a 14 percent stake in the Power Transmission Company Nepal Limited (PTCNL) which will build the project on the Nepali side.
HIDCL has a paid-up capital of Rs 8 billion, issued capital of Rs 10 billion and authorised capital of Rs 50 billion. The finance, energy, and law ministries, the Financial Comptroller General’s Office and other government agencies, including the Employment Provident Fund, Citizens Investment Trust and Rastriya Beema Sansthan, have share investment in the company.
Source : The Kathmandu Post