DINESH KARKI
KATHMANDU, March 16: Ministry of Finance (MoF) has given nod to reduce equity shares of Nepal Electricity Authority (NEA) in the Upper Tama Koshi Hydropower Limited (UTKHPL) from 51 percent to 41 percent.
The ministry gave its consent to the proposal forwarded by Ministry of Energy and the boards of NEA and UTKHPL last week. The company pushed for fresh restructuring in equity shares after Nepal Telecom (NT) expressed its commitment to invest in the project.
Anup Kumar Upadhyay, spokesperson and joint secretary of Ministry of Energy (MoE), said the ministry is in the process of submitting the proposal for restructuring the ownership structure of the mega hydropower project in the cabinet meeting to be held this week.
“We will expedite the process of seeking agreement of shareholders and signing loan agreement once the cabinet approves the proposal,” Mrigendra Bahadur Shrestha, director of UTKHPL and Chief of Upper Tamakoshi Project, told myrepublica.com.
The estimated construction cost of the 456 MW capacity project is Rs 33 billion, out of which the project has already managed Rs 32 billion through equity shares and loans.
“We have asked the government to provide remaining Rs 1 billion. Finance Minister Surendra Pandey has assured us to provide the required amount,” Shrestha added.
Besides NEA, four major investors - Employees´ Provident Fund (EPF), Nepal Telecom (NT), Rastriya Beema Sansthan (RBS) and Citizen Investment Trust (CIT) - have agreed to make a total loan investment of Rs 22 billion in the project. They have agreed to invest 10 percent of their loan amount as the equity share in the UTKHPL. The lending institutions have committed to invest in the project but are yet to go for financial closure before the final agreement.
EPF, the major lender in the project, has committed to invest Rs 12 billion and has agreed to be 20 percent equity partner in the company. NT, the second largest lender, has expressed commitment to invest Rs 6 billion with 6 percent equity in the company. The other two lenders - RBS and CIT - have decided to invest Rs 2 billion each with 2 percent equity partnership in the company.
The government has decided to mobilize internal investment in the project as the project is billed as one of the cheapest hydropower projects in the country so far. With the completion of this project, the long hours of load-shedding is expected to reduce significantly.
Construction to start by 2010-end
According to a source at UTKHPL, the construction works will start from October/November 2010. The company had earlier hoped to start construction before the monsoon.
“The companies will take at least three months to announce their financial closures. It will also take time to award tender and the contractors will take another six months to ferry necessary materials,” the source said, adding that the construction will start after the Tihar festival.
Published on 2010-03-16 02:00:01
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