Nepali company seeks to develop hydroelectric generation facilities greater than 25 MW

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On Dec. 17, Hydroelectricity Development & Investment Co. Ltd. (HIDCL) announced it is seeking to lead development of hydroelectric projects in Nepal that have a generating capacity greater than 25 MW. HIDCL is based in Babarmahal, Kathmandu, Nepal.

Scaling-Up Renewable Energy Program (SREP) formally registered HIDCL in July 2011, as one of several Nepali organizations approved to receive its investment funds for use to develop hydroelectric generation facilities.

According to SREP, state-owned HIDCL has an authorized capital of US$790 million, and existing capital of US$63.2 million. HIDCL said it is authorized to invest US$158 million in hydropower projects above 25 MW.

Deepak Rauniyar, HIDCL chief executive officer said, “Domestic and international investors are ready to invest in hydro projects developed under our [HIDCL] initiative.”

HIDCL funding includes, but is not limited to, the following domestic and international sources:

• Unknown U.S. dollar amount — Scaling-Up Renewable Energy Program
• US$79 million — Government of Nepal
• US$31.6 million — General Public
• US$15.8 million — Employees Provident [Pension] Fund: Manages Provident Fund in Nepal on behalf of the government of Nepal for government, public and private sector employees under the Ministry of Finance
• US$15.8 million — Nepal Beema Co.: A separate public limited company that handles insurance, unrelated to life insurance – for parent company Rastriya Beema Sansthan
• US$15.8 million — Citizen Investment Trust: An institution that carries out the Unit trust schemes and various kinds of voluntary retirement schemes (Pension funds, Gratuity funds, etc.) on the basis of fully funded and individual accounts

International source

Climate Investment Funds (CIF) is using part of its US$7.6 billion portfolio to invest about US$524 million in low-income nations to create access to reliable hydroelectric power through SREP.

Nepal, which has a population of more than 27.8 million according to 2013 census data, is presently facing an energy crisis of unprecedented proportions. International organizations, similar to CIF, estimate almost half of the country is without access to electricity.

According to information from SREP, the 706 MW total installed capacity of Nepal Electricity Authority (NEA) is inadequate to meet demand even though it is supplemented by purchasing power from India. Only about 56% of Nepal’s population has access to electricity, which includes off-grid solutions.

Domestic structure

Although no information is available on specific projects HIDCL seeks, the company is determined to provide a Nepal-based structure to mobilize funding for hydroelectric projects.

“We are engaged in a mission to mobilize funds from domestic and international resource bases,” HIDCL said. “This will cater to the needs of investments in middle- to mega-hydroelectricity generation, transmission and distribution projects.

HIDCL has never headed a hydropower project. But, it has invested in Nepal’s “Super Six” hydroelectric projects scheduled to be complete by 2019:

• 42 MW Mristi Khola ¬ — Run-of-river project the district of Myagdi on the Kaligandaki River
• 82 MW Lower Solu — Solu HEP is a run-of-river project located in the district of Sagarmatha on the Solu River
• 30 MW Khani Khola — Located in district of Dolakha
• 27 MW Dordi — Run-of-river project located in the district of Lamjung
• 25 MW Kabeli B1 — Run-of-river project located in the district of Panchtar
• 23.5 MW Solu Khola — Solu HEP is a run-of-river project located in the district of Sagarmatha on the Solu River

Licensure

The Nepali government has issued licenses to 89 promoters to construct projects that range in capacity of 500 KW to 456 MW, for a total installed generating capacity 2,355 MW. However, NEA and the private sector have only completed 38 projects with combined installed capacity of 706 MW, according to the NEA.

According to NEA, the largest projects in Nepal that currently have a government issued generation license include: Upper Tamakoshi (456 MW); Rasuwagadi (111MW); Mid Bhotekoshi (102 MW); Likhu IV (120 MW) and Lower Arun (400 MW).

HIDCL said, “We exist to mobilize funds for investment in generating, transmitting and distributing hydroelectricity to free the country from the chronic power shortages.”

In addition, the company mandates that it will do the following:

• Exclusively invest in hydropower projects
• Invest capital as either debt or equity in hydroelectricity generation, transmission and distribution projects
• Invest in hydroelectricity generation, transmission and distribution projects through banks and financial institutions
• Borrow, loan and receive grants from foreign and international financial institutions so as to invest in hydroelectricity generation, transmission and distribution projects
• Issue financial instruments such as bonds, debentures, and certificate of deposit for long-term capital mobilization

HIDCL said it also plans to fund related hydroelectric ventures that fall under the scope of its investment policies.
 

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