Print Edition - 2017-04-24 | MONEY
Govt embraces ‘company model’ to build two hydroelectric projects
Apr 24, 2017-
The government has decided to develop 1200MW Budhigandaki Hydroelectric Project and 410MW Nalsing Gadh Hydropower Project, the two much-touted hydroelectric projects, under the “company model”.
The projects were earlier being built through development committees formed by the government. A recently held Cabinet meeting decided to scrap the development committees, paving the way for development of the two hydro projects under the company model.
“The Cabinet, last week, approved the Energy Ministry’s proposal to develop both the projects under the company model,” said Dinesh Kumar Ghimire, joint secretary and spokesperson of the Energy Ministry. With this decision, the both the development committees have become defunct and the ownership of both the projects have come under the purview of Electricity Generation Company Limited which was incorporated in October 2016 by the government.
“Now, the state-owned generation company will take up the projects and expedite their development,” said Ghimire. “The generation company will either form subsidiary companies or forge partnerships with national and international private developers to create special purpose vehicles to develop the projects.”
The estimated cost for development of Budhigandaki and Nalsing Gadh projects stands at Rs250 billion and Rs100 billion, respectively. The detailed project report (DPR) of the Budhigandaki Project has been finalised and district administration offices of Dhading and Gorkha, the two project affected districts, are currently acquiring private land for the project. Similarly, Nalsing Gadh Project is waiting for the DPR from SMEC MWH Uday, the consultant appointed to prepare the report.
“The government’s decision will not affect the ongoing works of both the projects,” said Ghimire. “In fact, the construction work of both the projects will be expedited by the generation company.”
The government’s idea behind setting up the generation company was to develop reservoir-type hydropower projects like Nalshing Gadh, Budhigandaki, Naumure, Sun Koshi and Karnali Chisapani. The generation company was established under the Company Act 2006. The company will offer 17 percent stake to the general public.
The Energy Ministry and Nepal Electricity Authority (NEA) have 20 percent and 10 percent stakes in the generation company, respectively. Likewise, Finance and Law ministries own 5 percent stake each, while the Employees’ Provident Fund and Nepal Telecom have 10 percent stake each. Citizen Investment Trust, Hydroelectricity Investment and Development Company and Rastriya Beema
Sansthan have stakes of 5 percent, 4 percent and 2 percent, respectively.
Besides the general public, 10 percent stake in the company will be offered to locals of districts affected by hydropower projects being developed by the company, and 2 percent will be allotted to highly impoverished people.
The company has a paid-up capital of Rs300 million and authorised capital of Rs 20 billion.
Published: 24-04-2017 08:05