Hydroelectric Investment and Development Company (HIDC) started operations on Monday, one year after it was established. The company announced the beginning of business transactions amid a function.
Established to generate resources from national and international sectors to finance hydropower projects with a capacity of more than 25 MW and transmission and distribution lines, HIDC will start providing finance as a consortium partner with commercial banks in the initial phase.
Speaking at the inauguration, HIDC board member Mahesh Dahal said that the company was open to providing loans to projects receiving credit from banks as their consortium partner beginning from Monday.
A board member and deputy governor of Nepal Rastra Bank (NRB) said that the company planned to finance projects as a consortium partner of commercial banks as the company has no technical expertise and experience on hydropower financing at the moment. “The company’s involvement as an investment partner will help in its learning process,” he said.
The central bank, the regulator of the company, has also approved providing finance as simply a consortium partner initially. He urged banks to provide details of the projects they are planning to invest in and involve HIDC in the deal.
The company said it would also issue credit to ongoing projects with a capacity of more than 10 MW if the lead bank in the consortium gave a guarantee. HIDC agreed to finance small power producers through a refinancing mechanism in response to their complaints.
As most of the projects being developed by Nepalis have a capacity of 25 MW, doubts are being raised if the government made a mistake by setting the cut-off point for financing eligibility at 25 MW.
HIDC chairman Hare Ram Koirala said that the company wanted to invest in projects where Nepali developers cannot generate resources by themselves. “The country’s needs cannot be fulfilled without the development of medium and large-scale projects,” he added.
The company has planned to lend from its existing resources which amounts to Rs 6.7 billion. “As international organisations are also willing to provide resources to the company, there will be no dearth of funds,” said Adhikari.
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.HIDC 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 made share investments in the company.