As Nepal has been passing through a severe power crisis, Hydroelectricity Investment and Development Company Limited (HIDCL) is organizing a Hydro Power Investment meeting. Having more than eighteen years of working experience in Employees Provident Fund in the executive positions, DEEPAK RAUNIAR, chief executive officer (CEO) of HIDCL, spoke to NEW SPOTLIGHT on the importance of the meeting.Excerpts:
At a time when Nepal has been facing financial constraints in implementing the hydropower projects, how do you justify the importance of the forthcoming International Hydropower investment meeting?
We are organizing the International Hydropower Investment meeting on 28-29 August in Kathmandu to attract investment for the medium and large hydropower projects in Nepal. The meeting is very important to bring stakeholders of the hydropower sector together at this juncture as the government has identified hydropower development as the priority development agenda in its plan and policies. Ministry of Energy, Ministry of Finance, Investment Board of Nepal (IBN) and Asian Development Bank are jointly supporting this initiative of HIDCL.
How will it be meaningful?
It is not just a meeting where people come in and meet for two days and leave. We do have two days of fantastic sessions. This is the reason we have been very cautious on this. This meeting will be instrumental in generating interest and attracting interest of investors in Nepal. Since we as a company pursue those interests, we are also actively pursuing events and post events follow up. This is also a big opportunity for us, as this company has been established for that purpose.
How will it be different from other meetings?
This meeting will also mark as a more focused and a long overdue follow-up activity of the Investors Forum of 2011, and a reflection of Asian Development Bank's continued commitment to the development of the power sector of Nepal. The main focus will be to showcase specific medium and large scale hydropower projects and to attract investments for such projects. The meeting will provide participants an opportunity to discuss about the potential projects in detail with concerned stakeholders and their inputs.
Who will take part in the meeting?
We are expecting that key international and domestic hydropower developers, investment companies, sovereign wealth funds and utility companies will take part in the meeting. Invitations have already been extended to the prospective participants. A number of invitees have already confirmed their participation for the meeting.
Why will investors come to invest here?
What we see is that there is a renewed interest in hydropower sector in Nepal. There is a domestic market as well. Hydropower, if it is supposed to be a business, it requires markets. As we have been going through a painful power crisis of up to 16 hours of load-shedding, the experience has shown us that there is a market as well. With cross-border transmission lines coming in, it has also opened up the possibility to export power. The electricity can go to India or other country through India. So there is a renewed interest in regard to the hydropower projects in Nepal, both in the domestic and international sectors. The good thing is a number of projects are already identified for both purposes. If we want to pursue these projects in construction, we require investment.
What is the aim of HIDCL?
HIDCL as a company was established in July 2011 by the government of Nepal. We should know why the government of Nepal came up with the idea to establish the company. Nepal has immense hydropower development potential. However, the country has not been able to harness it. There are a number of factors that have contributed to this situation. The capacity of funds financed for the projects is one of the main factors. At a time when there is a lack of institutional capacity to finance the major projects, the government of Nepal has decided to set up this company. To remove the financial constraints, this company has been structured as one of the biggest capital financing company.
What is the financial position of the company?
Our authorized capital is Rs.16 billion and issued capital is Rs. 10 billion. This is one of the biggest financial institutions to look at the hydropower sector. With that capital, we intend to operate and raise funds required for middle to mega projects. The second thing we want to do is to develop the technical capability. Traditionally, the banks and financial institutions were also involved in financing hydropower projects. However, the core job of financial institutions is banking, not hydropower financing.
Why is this required?
Many of these banks do not have the technical capability required to finance the projects. We intend to develop that. Our mandate is to raise finances both from domestic resources as well as some international resources. We are doing that. We already have a number of projects coming to us for financing. Each project requires finance. As of now, we have the sufficient capital. However, we may need more capital in the future. Our issued capital is Rs.10 billion, which belongs to various institutions, including the government of Nepal. We do have eighty percent of promoter's money that is Rs. 12 billion. We are also able to generate the money out of that both in terms of interest income and non-interest income. Our fund is now about 7.8 billion rupees at the end of financial closure of 2069/2070.
How many projects do you have now?
We have already committed to a number of projects like 42 MW Misti Khola project. We have already decided to invest Rs. 1.2 billion in the project as debt financing. We are also equity partner to Dhalkebar-Mujaffarpur Cross Country Transmission Line Project. A number of promoters come to us along with other banks to be a partner in the consortium. We have four projects that have come to us, ranging from 20 MW to 27 MW. We are doing our homework now. Besides that a number of projects have directly applied with us, some asking for investment and others requesting to invest on us.
What types of investors are you inviting?
We have been very selective in inviting investors. We have invited the people in terms of our needs and requirements. We want investors with the capacity as well as willingness to invest. Given that context, we did some homework and identified investors from around the world. There will be representatives from Australia, Europe, India and China.
How is ADB helping?
The Asian Development Bank is very committed to the power sector. They want to help and develop Nepal's power sector. In the recent project also, they had a role to play. We are jointly doing this as a partner for progress.