With more than three decades of experience at NEA, Manoj Silwal, who retired as Deputy Managing Director before assuming the role of Managing Director, is known for his quiet and diligent work ethic. With his extensive tenure at the organization, MD Silwal possesses a deep understanding of its operations. He was appointed by the Interim Government led by Sushila Karki to enhance service delivery, and under his leadership, the organization has successfully increased revenue by generating an additional 45 MW of electricity from troubled plants. In a recent interview with New Spotlight, he elaborated on the issuance of bonds and loans.
What is the current financial situation of NEA?
NEA’s financial status is currently stable. There is no cash shortage, and daily revenue collection is satisfactory.
NEA had initiated the process of obtaining a Rs. 10 billion loan from a commercial bank three months ago due to cash flow issues. What is the status of the loan?
Although NEA is currently in a surplus position and does not require a loan, the loan process is in its final stages. If NEA needs additional funds in the future, it will approach the bank for a loan. When Kulman Ghising took over, NEA’s financial position was strong, and the loan agreement has already been signed.
If NEA is financially stable, why is it issuing a Rs. 20 billion bond?
NEA is issuing bonds to fund four projects: Upper Arun, Chainpur Seti, Modi, and Tamakoshi V. Two of these projects, Tamakoshi V and Modi, are already in the construction phase and require funding. All four projects are subsidiaries of NEA and need to increase their equity and investment. Construction work on the Audit Tunnel and access roads in Chainpur Seti is currently underway. The largest allocation of funds, nearly Rs. 10 billion, will go to the Upper Arun project. Construction work on access roads, tunnels, bridges, and camps is progressing in Upper Arun, which is one of NEA’s largest projects. Financial resources are needed for this project, and the bidding process is underway.
How about utilizing the funds for the Dudh Koshi storage project?
As previously mentioned, the funds generated from this bond will be allocated to four projects, not including the Dudh Koshi storage project. Currently, we are funding these projects using internal resources.
Has NEA ever issued bonds in the past?
I do not have a specific recollection of NEA issuing bonds, but there have been reports of NEA issuing bonds in smaller amounts previously.
What are the benefits of issuing bonds?
Once NEA receives approval from the Securities Board of Nepal (SEBON), we will determine the terms and conditions of the bond issuance. We will engage a consultant to assess market conditions and set the interest rate for the bond.
The July 17th flood caused damage in the Bhotekoshi river, affecting Trishuli 3 A and one 15 MW unit. How much loss did NEA incur?
NEA incurred a loss of 270 million per month due to the critical damage to these generation units. We closely monitor daily generation and make timely decisions to address any issues. The problems were resolved within two days of identification.
Will NEA consider taking out a loan?
NEA is currently operating without taking out loans to avoid paying interest. We do not foresee the need for taking out a loan at this time.
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