The much-awaited 456MW Upper Tamakoshi Hydro-power Project is gearing up to float shares to the public, including those residing in project-affected areas, in December.

The project is planning to launch initial public offering (IPO) equivalent to 25 percent of its stake, which is worth Rs2.64 billion. The project hopes to wrap up the share distribution process by March 2018.

Nepal Electricity Authority (NEA), the state-owned power utility and one of the promoters of the project, is selling 10 percent of the shares of the project to locals of Dolakha district affected by the project. It is offering another 15 percent of the project’s stake to the general public.

A meeting of the District Coordination Committee (DCC) Dolakha held recently has decided to issue 10 percent of the project’s shares to project-affected locals immediately after completion of the provincial and federal elections.

“We will launch the IPO after the elections slated for the last week of November are over,” said Upper Tamakoshi Project Chief Bigyan Raj Shrestha. “First of all, we will distribute 10 percent of the project’s shares to project-affected residents. We will then allot another 15 percent of the project’s shares to the general public.”

If shares allocated for project-affected locals go unsubscribed, the hydropower project will allow the general public to purchase those shares.

The DDC Dolakha has requested the project to allow locals of Dolakha to purchase minimum 30 units of shares as against the provision of 50 units introduced by the Securities Board of Nepal (Sebon), the securities market regulator.

“As banks and financial institutions have not shown interest to provide collateral-free loans to project-affected locals, we fear that impoverished locals of the district will not be able to tap the opportunity of owning a stake in the project,” said DCC Dolakha Chief Dabal Pandey. “Therefore, we have called on the project developer to request the regulator to make amendment to the provision on minimum number of shares that needs to be purchased during IPO.”

The Upper Tamakoshi Hydropower Project is considered a strategic project to end the acute power shortage felt by the country. As of now, it is on track to meet the revised completion deadline of July 2018.

The project, so far, has completed 90 percent of construction works, according to Shrestha. “We have almost completed digging 16-km tunnel as well,” said Shrestha. “We need to dig around 390 meters more to achieve a major breakthrough. We hope to achieve that goal within a couple of months.” 

The national-pride project was originally scheduled to be completed in mid-July 2016, but the earthquakes, Indian trade blockade and various technical and social issues pushed back the completion date. Prior to the earthquakes hit the country, the project had completed 79 percent of civil works. The project faced cost overruns due to these delays. The project is now expected to cost Rs42 billion, up from the previous estimate of Rs 35.3 billion.