Print Edition - 2016-11-16 | MONEY
Registration process for EGCL initiated
Nov 16, 2016-The Energy Ministry has begun the registration process for Electricity Generation Company Limited (EGCL), more than a month after getting the go-ahead from the Cabinet. It filed the registration application with the Office of the Company Registrar on Tuesday along with a registration fee of Rs6.1 million.
“After the company is registered, the ministry will form a board of directors and begin hiring staff, starting with the chief executive officer.” The ministry will rush to get the company up and running as soon as possible, Panta added.
The proposed company will be established under Company Act 2006, with the promoters holding a 71 percent stake and the public the rest. The company will have a paid-up capital of Rs300 million and an authorised capital of Rs20 billion.
The idea behind setting up the company, according to the ministry, is to develop reservoir-type hydropower projects like Nalshing Gadh, Budhi Gandaki, Naumure, Sun Koshi and Karnali Chisapani.
Out of the 29 percent of the shares that will be issued to the public, 17 percent will be offered to the general public, 10 percent to locals of the districts affected by the project and 2 percent to people from the highly impoverished class.
Regarding promoter shares, the Energy Ministry and the Nepal Electricity Authority (NEA) will hold 20 and 10 percent respectively. Likewise, the Finance and Law ministries will get 5 percent of the shares each while the Employees’ Provident Fund and Nepal Telecom will get 10 percent each.
Citizen Investment Trust, Hydroelectricity Investment and Development Company and Rastriya Beema Sansthan will get 5, 4 and 2 percent of the shares respectively. The ministry decided on the share ownership structure after holding consultations with the respective ministries and government agencies.
The ministry’s move to incorporate Electricity Generation Company Limited is part of the scheme to unbundle the NEA. The authority is currently engaged in four different tasks—building transmission networks and generating, distributing and trading electricity. The government had decided to create four autonomous units after the state-owned utility could not execute its widely varied duties in an efficient and effective manner. Towards this end, the government has formed National Transmission Grid Company (NTGC), and currently the ministry is in the process of appointing a chief executive officer (CEO) for the company through free competition. A three-member committee coordinated by Kewal Prasad Bhandari, joint financial comptroller general of the Financial Comptroller General’s Office, has been created to make the appointment, and it has already issued a wanted notice. The government established NTGC in February 2015 to build and operate electricity transmission lines, but the company has remained immobile due to lack of an executive head. Nine government agencies, namely the Energy, Finance, Forest, Environment, Land Reform, Communications, Defence and Home ministries and the NEA have stakes in NTGC. The ministry’s next move will be to establish Electricity Trading Company which will be responsible for buying power from various developers including Electricity Generation Company. It will also export and import power to and from India, according to the ministry. After these three companies go into full-fledged operation, the NEA’s job will be limited to electricity distribution.
Published: 16-11-2016 08:07