The Cabinet on Thursday approved the Energy Ministry’s proposal to set up a company to generate hydroelectricity under partial public ownership.

The proposed “Electricity Generation Company Limited” will be established under the Company Act 2006, offering 17 percent stake to the general public.

The idea behind setting up the company is to develop reservoir-type hydropower projects like Nalshing Gadh, Budhi Gandaki, Naumure, Sun Koshi and Karnali Chisapani, according to a statement issued by Energy Minister Janardan Sharma.

The ministry will initiate the incorporation process of the company immediately after Dashain vacation, according to officials.

“First of all, we will register the company at the Office of the Company Registrar,” said Joint Secretary Dinesh Kumar Ghimire. “Once the company is registered, we will begin the process to hire staff, starting with the chief executive officer.”

Besides the general public, 10 percent stake in the company will be offered to locals of districts affected by projects and 2 percent will be allotted for the people from highly impoverished class.

The ministry and Nepal Electricity Authority (NEA) will hold 20 and 10 percent stake, respectively. Likewise, Finance and Law Ministries will own 5 percent stake each, while the Employees’ Provident Fund and Nepal Telecom will have 10 percent shares each.

Citizen Investment Trust, Hydroelectricity Investment and Development Company and Rastriya Beema Sansthan will get 5, 4 and 2 percent stake, respectively.

According to Ghimire, his ministry held consultations with all the aforementioned government agencies and ministries before finalising the share allotment.

The company will have a paid-up capital of Rs300 million and authorised capital of Rs20 billion.