Kathmandu, 6 January : An investment framework (modality) has been prepared to construct the 454-megawatt Kimathanka Arun semi-reservoir hydropower project, identified in Bhotkhola Rural Municipality–2 of Sankhuwasabha, using domestic capital.
The project, with an estimated cost of NPR 97.94 billion including interest during construction, will be implemented by the Electricity Generation Company, which is itself founded by the government and government agencies. A financial management modality has been prepared to raise 70 percent of the total project cost—amounting to NPR 68.55 billion—through loans, and the remaining 30 percent—NPR 29.38 billion—through equity (own capital).
It has been proposed to raise loans through co-financing from the Hydroelectricity Investment and Development Company (HIDCL), the Employees Provident Fund, the Citizen Investment Trust, the Social Security Fund, insurance companies, and banks and financial institutions.
The funds to be raised through equity will be collected by issuing shares to the company’s founders, non-resident Nepalis and Nepalis working abroad, local residents of project-affected districts, members of ultra-poor households, and the general public.
Minister for Energy, Water Resources and Irrigation, Physical Infrastructure and Transport, and Urban Development, Kulman Ghising, while taking note of the proposed investment modality prepared with financial analysis, instructed that the project’s estimated cost be updated and that the financial management process be moved forward immediately in accordance with the revised figures.
Minister Ghising pointed out that although the Electricity Generation Company holds multiple project licenses, it has yet to build any project, and emphasized that developing the Kimathanka project on its own is essential for the company’s long-term sustainability.
Ghising instructed that the project’s proposed investment structure and the company’s institutional equity plan, prepared in line with it, be immediately approved by the company’s Board of Directors and submitted.
A total of NPR 731.4 million has been spent on studies and pre-construction works for the Kimathanka Arun project. Land has already been acquired for the construction of the project office and staff housing (camp). Compensation and damages have been determined for the land required to build structures such as the dam, reservoir, and powerhouse, for which approximately NPR 450 million will be required.
The project is expected to generate 269 million units (2,690.97 GWh) of electricity annually. Of this, peak and off-peak generation during the winter season will be 47.31 million units and 35.33 million units respectively, while generation during the monsoon season will be 186.46 million units. Annual revenue from the sale of this electricity is projected to be NPR 1.691 billion.
In the Electricity Generation Company, the government holds 30 percent, the Nepal Electricity Authority, Employees Provident Fund, and Nepal Telecom each hold 10 percent, the Citizen Investment Trust holds 5 percent, HIDCL holds 4 percent, and Rastriya Beema Company holds 2 percent as founder share ownership. Twenty-nine percent of the shares have been allocated for the general public.
