RS 3.23B od HIDCL Remains Uninvested

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    There is currently lack of investment in the country’s hydropower sector. Construction of dozens of attractive projects has not started in lack of financial closure. But promoters of eight different projects with combined installed capacity of 271 MW that have signed loan agreement with the Hydropower Investment and Development Company Limited (HIDCL) worth Rs 3.23 billion have not used the loan.

    Different banks and financial institutions including the HIDCL have signed loan agreement worth Rs 25 billion for these projects. Total cost of these projects is Rs 42.39 billion. The HIDCL has failed to invest in even a single company over four years after it started business with the promoters not taking loans as per the loan agreement. Its plan of arranging additional investment by bringing different financial tools has also been affected due to lack of investment in hydropower. It is currently earning interest worth tens of millions by keeping its money in different fixed deposit accounts in lack of investment.

    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. It has signed loan agreement ranging from a minimum of Rs 150 million to Rs 1 billion depending on the capacity of projects. Loans of other banks and financial institutions, that had co-financed with the HIDCL, have also not been used with the projects stalled due to different reasons. They have held that amount. There has not been any investment in recent times with the Nepal Electricity Authority (NEA) signing power purchase agreement (PPA) with promoters refusing to not procure electricity during the four months in rainy season when generation is high.

    Chief Executive Officer (CEO) of the HIDCL Deepak Rauniyar says promoters have not used loans in lack of start of construction. He adds that the promoters who have not used loan will be fined to discourage the practice of not using loans as per the schedule. He states that there has been no investment also due to the earthquake on April 25 and subsequent aftershocks.

    Construction of Mistrikhola, that had first signed the agreement, has yet to start as promoter Robust Energy has yet to use the Rs 1 billion it signed loan agreement with the HIDCL for. It has also not taken Rs 3.24 billion signed with other banks and financial institutions. Led by Nabil Bank seven different financial institutions including the HIDCL have signed investment agreement with Mistrikhola.

    The HIDCL similarly has signed loan agreement for Rs 500 million for 27 MW Dordikhola, Rs 200 million for 23 MW Solu, Rs 400 million for 30 MW Khanikhola, Rs 200 million for 25 MW Kaveli B, Rs 600 million for 82 MW Lower Solu, and Rs 200 million for 20 MW Bagmati Small Project. Preliminary agreement for Rs 150 million for 21.6 MW Hewakhola has been signed but loan agreement has yet to be signed. The HIDCL has also signed investment agreement for 40-kilometer 400 KV 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).

    Projects have not moved forward in lack of transmission line in the Kaligandaki corridor. Promoter Robust Energy had aimed to complete Mistrikhola in 2016 but the project faces uncertainty with the Nepal Electricity Authority (NEA) yet to construct transmission line. The seven other projects have also not moved forward. Upper Solu Hydropower has started Solu project but there is uncertainty about transmission line. The HIDCL says Upper Solu will use loan soon.

    The government through the budget for the current fiscal year has adopted a policy of moving projects forward as per the concept of remit hydro. The HIDCL has investable capital of Rs 9 billion and is issuing shares worth Rs 2 billion to the public. The government has already given Rs 5 billion to the HIDCL, and the Citizen Investment Trust (CIT), the Employees’ Provident Fund (EPF) and the Rastriya Beema Sansthan Rs 1 billion each. Authorized capital of the company is Rs 50 billion, issued capital is Rs 10 billion and pledged capital, to immediately pay, is Rs 8 billion.

    Source : Karobar Daily