"Good Investment Prospects In Hydropower"

At a time when the government has announced plans to promote private sector investment in hydropower, DEEPAK RAUNIYAR, Chief Executive Officer of Hydroelectricity Investment and Development Company Limited, spoke to NEW SPOTLIGHT on various issues.

July 25, 2014, 5:45 p.m. Published in Magazine Issue: Vol: 08 No. -4 July. 25- 2014 (Sharawan 9, 2071)

How do you evaluate your investment in the last year?

As a company, we have made some major achievements in the last one year. We have decided to invest in four Hydropower projects with a capacity of over 122.5 MW and all four projects are at the final stage of financial closure. They will go for construction soon.

As your organization was established a year ago, what is the state of investment now?

I am very happy to say that we have made some major decisions so far as investing in the construction of hydropower is concerned. The Board has already agreed to provide loan for four projects worth about 2.6 billion rupees. The projects include 42 MW Mristi river in Myagdi, 27 MW Dordi river in Lamjung, 20 MW Solukhola River in Solukhumbu and 30 MW Khani Khola in Dolakha. We have 966 million rupees investment in Mristi River hydropower project.

What is the status of those projects?

Mristi Khola has already made financial closure. It is likely to go for construction from this year. Similarly, other projects are also likely to go for construction by the coming winter.

What other projects do you have now on the pipeline?

The proposal of 21.6 MW Hewa, 25 MW Kabeli B, 82 MW Lower Solu,20 MW Small Bagmati, 30 MW Nyadi River of Lamjung and 18 MW Upper Solu River are under consideration in the company. We are studying the proposals.

How do you see the response from other companies?

Other companies are also contacting us. They did not come with complete and concrete proposals. As an investor, we will definitely respond if we see the project proposal is attractive and the rate of return is high. Some projects, even with a capacity of over 86, 76, 50 MW, have approached us. However, they are in the preliminary stage of discussion.

What other activities has your company been undertaking now?

Under the agreement among the World Bank, Nepal Government and Kabeli Energy Limited, our company will manage 40 million US dollars available to Nepal to invest in Kabeli project. According to a tripataite agreement, we are now in the process of preparing various loan agreements.

What about your support to expansion of transmission lines?

Being a promoter of one of the Transmission Company, we are very pleased that Power Transmission Company Nepal Ltd has already started the expansion of transmission lines. We have already dispersed the share amount of money to the company.

Besides these, what other activities are you taking up?

We have already constituted a working team to study two projects, including one run-off-the river and one storage project. We will announce our investment after receiving the study report.

Although you have presented an ambitious plan, what is the state of capital?

The currently available fund of about Rs. 8 billion is not enough for us. We are working to increase our total capital through different ways. What I can say is that we are likely to have over Rs. 20 billion capital by next year. It will be sufficient to fund a few more other projects.

Have you been negotiating with multilateral donors?

We are in the initial phase of negotiations with the Asian Development Bank. We have already requested the government to make proper utilization of concessional loan available to the country through the company. We hope that the company can have some access to such loans.

How can you generate the remaining money?

We are now in the stage of fund utilization. We have already made commitments for 2.10 billion rupees. And there are projects in the pipeline. We need more funds. Along with approaching multi-lateral donor agencies, we are also planning to raise the money from the public. We have already finalized the issue with Security Exchange Board and we will float the shares worth of Rs. 2 billion IPO in the market. As the demand is growing, there is the need for more capital.

How hopeful are you on IPO?

Given the current interest in the market, I am confident that we will easily collect the money from the market. We are now out of comfort zone. We have three or four avenues to increase the capital. First is issuing IPO through Security Exchange Board. We are prepared to issue IPO and we have to select the issue manager on a competitive basis. We hope there will be subscription. Since our performance is good, high return in the investment is likely in the coming days. Thus, people will buy IPO.

What plan do you have to materialize all this?

We need to take proactive steps for push storage project and we need to take lead on it. We have already constituted a committee which will give its report. The government has already selected some attractive projects. Something will come out by next year.

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