We have mobilised loans worth Rs 5.02 billion in 11 hydroelectric projects ranging from 20 to 86 megawatts, that were initiated by the private sector and they have already carried out the financial closure. These projects have total generation capacity of 437 megawatts. Similarly, we have investment in Remit Hydro Limited (RHL) and the Power Trading Company Nepal (PTCN). We have cent per cent ownership in RHL. The paid-up capital of RHL stands at Rs 255 million and in PTCN we have 14 per cent share. We are also negotiating with six other projects with total capacity of 205 megawatts to make investments in the near future. Since we have been established as a financial institution, we are always looking for areas of investment — both loans and equity investment. We are also preparing to purchase around 10 per cent share of Hydroelectricity Generation Company, which the government has been preparing to establish in the near future.

HIDCL’s paid-up capital stands at Rs 10 billion and you have already made investments worth Rs 5.02 billion in hydroelectricity projects and the company also owns RHL and 14 per cent share of PTCN. What plans do you have to mobilise resources for other projects in the pipeline that you have been talking about?

You have spoken about mobilising domestic resources including remittance money for hydroelectricity development. Till date, funds have already been mobilised for projects with total capacity of 700 megawatts. Does the country have enough resources for more hydroelectricity projects?

Besides the resources that have already been mobilised for projects with total capacity of 700 megawatts, I am confident that we will be able to mobilise funds for other projects with total capacity of 1,000 megawatts in the next 10 years. There are many benefits in mobilising domestic resources. The major thing is there will not be any issue of Power Purchase Agreement (PPA) in US dollar terms, which comes as a pre-condition while bringing in foreign investment. The foremost thing we have to understand while talking about mobilising domestic resources is that we do not need all the funds in one single year when developing hydropower projects. We have also been mulling over taking the lead in developing additional projects with total capacity of 400 megawatts. We will be able to develop those projects by mobilising around Rs 10 billion every year in the next four years and BFIs, general investors, locals and others would also be able to contribute in those projects. Along with managing the resources we also need to start focusing on mitigating other challenges like proper management of the projects to ensure better returns for the investors of the projects.

The country sorely lacks transmission line projects, which has been identified as one of the major hindering factors for hydroelectricity generation. Why has HIDCL not mobilised funds in transmission projects?

Financing transmission line projects is also in our mandate. We make investments in all bankable projects whether they are initiated by government-owned entities or the private sector. It is true that the lack of transmission line projects has been pushing back hydroelectricity development. We are open to the idea of investing in transmission line projects. We have been thinking seriously on how to move ahead and where we will be in the next five years. We have an obligation now to manage resources for projects with total capacity of 125 megawatts that are going to be developed by our subsidiary company RHL. The RHL recently bagged survey licence of two projects in Taplejung district — the 71.5-megawatt Ghunsa Khola Hydropower Project and 53.7MW Sinbuwa Khola Hydropower Project. Both the projects are located close to each other and RHL will develop them simultaneously, which means RHL will treat them as a single project. The feasibility study of the Ghunsa Khola project has already been done and all the works that have been completed till date by the Department of Electricity Development (DoED) will be transferred to us and RHL will begin from there. The survey licence has set a deadline of five years for us to complete all the pre-construction works before we can obtain the generation licence. However, we expect RHL to complete all the pre-construction works like feasibility study, detailed design, initial environment examination, and environment impact assessment, among others within two years. RHL will fast-track these procedures and the construction works will begin as soon as possible.

How will HIDCL manage the financial resources for RHL to achieve financial closure for the two projects in Taplejung?

RHL expects to complete these projects with investment not exceeding Rs 19 billion. RHL plans to hold 51 per cent stake in these projects, while 24 per cent equity investment will come from migrant workers, 10 per cent from the locals, and the remaining 15 per cent will be raised through IPO. RHL has been preparing to allocate 50 per cent each of the local shares and IPO to females to promote gender inclusion and also to empower women. Now challenge for RHL is to reach out to the maximum number of migrant workers possible to sell the 24 per cent of shares allocated to them.

You mentioned that HIDCL is willing to take the lead to develop more hydroelectricity projects with total capacity of around 400 megawatts in the future. Has there been any development in this front?

As of now there has not been any development in this front. It is understood that there is huge demand of electricity in the country and the government is preparing to increase electricity import to 900 megawatts in the next three years despite the fact that the Upper Tamakoshi and some other projects will start commissioning power in this period. To address this huge power-crunch we have been planning to take the lead in projects with total capacity of 400 megawatts. The Ministry of Energy has envisaged to develop 10,000 megawatts of electricity in the next 10 years in the ‘National Energy Crisis Prevention and Electricity Development Decade, 2016’, which was unveiled as the government’s whitepaper last year. In this situation, we have to be well prepared to mobilise funds (both domestic and foreign) to achieve the government’s target.