The promoters, who have signed loan agreement with the Hydropower Investment and Development Company Limited (HIDCL) to construct hydropower projects, have not used the loan.
The HIDCL has signed loan agreements worth Rs 4.16 billion for projects with combined installed capacity of 350 MW in almost four years but just Rs 50 million (by 23.5 MW Solu Hydropower Project) out of that has been used until now. Studies by the promoters have put estimated cost of constructing these 10 projects at Rs 59.68 billion.
The HIDCL has not even borrowed Rs 5 billion from the Asian development bank (ADB) in soft loan as the promoters have not used the loan amount with construction of the projects yet to start owing to the earthquake on April 25 and Indian blockade. The HIDCL, in co-financing with banks and financial institutions, has signed loan agreements from Rs 150 million to Rs 1 billion with each project depending on installed capacity.
Chief Executive Officer (CEO) of HIDCL Deepak Rauniyar says promoters will take the loan amount once construction of the project starts as fuel supply is easing. He claimed that trust of investors and bankers toward the HIDCL is rising thereby increasing the amount of loan agreements. He revealed that the HIDCL is preparing to sign loan agreements with another seven projects.
Promoters, who have been complaining about lack of capital to invest in the sector, have not been able to use loan as per agreement. Dozens of financially attractive projects also have not been constructed with the promoters failing to make financial arrangements. The government had formed the HIDCL with an aim of investing only in the hydropower sector. The HIDCL signed loan agreement in co-financing with different banks and financial institutions after starting operation in 2010.
The HIDCL has signed loan agreement worth Rs 900 million for 30 MW Nyadi and 49.6 MW Super Dordi. It has also formed Remit Hydro Limited and made share investment of Rs 50 million to manage investment for Ghunshakhola (71 MW) in Taplejung and Simbuwakhola (53 MW) from youths who have gone for foreign employment.
The HIDCL has also signed investment agreement for 40-kilometer 400 kVA transmission line from Dhalkebar to Bhittamode under the Nepal-India Trans-national Transmission Line, and agreement for 14 percent of equity investment in the Power Transmission Company Nepal (PTCN).
Work of Mistrikhola and Lower Solu projects has yet to start due to the delay in construction of transmission line. The HIDCL had signed the first loan agreement for Mistrikhola. There are also problems in transmission line for other projects.
Capital of the HIDCL has increased to Rs 11 billion after issuing shares worth Rs 2 billion to the public. It is currently earning interest by depositing money in banks. It can now issue bonds and take soft loans from banks and financial institutions, and invest on hydropower projects after issuing shares for commoners.
Projects with loan agreement
Projects Installed Capacity Loan Amount
Mistrikhola 42 MW Rs 1 billion
Dordikhola 27 MW Rs 500 million
Solukhola 23.5 MW Rs 200 million
Khanikhola 30 MW Rs 400 million
Bagmatikhola 20 MW Rs 200 million
Kaveli B 25 MW Rs 200 million
Lower Solu 82 MW Rs 600 million
Lower Hewa 21.6 MW Rs 150 million
Nyadi 30 MW Rs 500 million
Super Dordi 49.6 MW Rs 400 million
Projects with Share Investment
Remit Hydro Limited Rs 50 million
Power Transmission Company Rs 36.40 million
Source : Karobar Daily