The Upper Tamakoshi Hydropower Project, which had been operating at a loss continuously for four years after beginning electricity generation, is now moving toward profitability in the current fiscal year. According to Purna Gopal Ranjit, Acting Chief Executive Officer of Upper Tamakoshi Hydropower Limited, the company’s financial condition has improved due to better power plant operations, a reduction in hydrology penalties, and successful efforts to lower the interest rate on its long-term loans.
According to him, the company is now in a position to earn a profit of around NPR 1 billion. The improvement has been driven by increased income from electricity generation and sales, along with reductions in hydrology penalties and interest rates.
Recently, Upper Tamakoshi’s revenue from electricity sales has increased. At the same time, the reduction in hydrology penalties and interest rates has provided additional financial relief to the company.
Ranjit said that in the past, the company had to pay hydrology penalties to the Nepal Electricity Authority because it was unable to generate electricity according to the amount of water available in the Tamakoshi River. In fiscal year 2021/22, Upper Tamakoshi paid NPR 3.3 million in hydrology penalties. The penalty increased over the years, reaching NPR 220 million in fiscal year 2024/25.
Over a four-year period, the company paid approximately NPR 1 billion in hydrology penalties. However, Ranjit said that the company did not have to pay any hydrology penalty in the latest fiscal year.
Another major factor behind the company’s improved financial position is its success in reducing the interest rate on its long-term debt.
According to Acting CEO Ranjit, the interest rate on the company’s long-term loans has been reduced from 8.25% to 6.75%. The reduced rate will remain fixed for at least three years. As a result, the company expects to save around NPR 750 million in annual interest expenses, amounting to approximately NPR 2.25 billion in financial-cost savings over three years.
Although the company spent NPR 250 million on reconstructing project structures damaged by floods, Ranjit said that even after accounting for the entire reconstruction expense, the company is still on track to make a profit. WECS To Held Symposium For Nepal’s Super El Niño Readiness And Mitigation Plan
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