The Employees Provident Fund (EPF) has started collecting funds from the cash dividend distributed to its member depositors in fiscal 2016-17 to invest in Betan Karnali Hydropower Project initiated by the EPF.

The EPF has been converting cash dividend provided to each member depositors from 2015-16 into shares of the hydro company and it has collected around Rs 1.3 billion from the cash dividend of fiscal 2015-16, as it had distributed 0.65 per cent cash dividend in that particular fiscal.

Similarly, the EPF has announced 0.75 per cent cash dividend to its depositors in fiscal 2016-17.

The EPF has asked the member depositors, who do not wish to convert their cash dividend into shares, to submit their application at the Thamel branch of EPF.

The EPF has so far accumulated Rs 2.85 billion by converting cash dividend into shares. The EPF has yet to publish its audited balance sheet of fiscal 2017-18, it is reported that the EPF has earned profit of around Rs three billion and will be able to accumulate more funds by converting cash dividend provided to member depositors into share.

The EPF has 600,000 depositors and it has committed to generate equity investment of around Rs 21 billion for Betan Karnali. Out of the total estimated investment, 30 per cent or Rs 21 billion will be share capital and 70 per cent or Rs 49 billion will be loan investment. Nepal SBI Bank and Nabil Bank have so far committed to provide Rs 25 billion under consortium financing for the project.

According to Deepak Rauniyar, chief officer of the EPF, who is looking into this project, EPF is planning to complete the project within five years, and the developer — Betan Karnali Sanchayakarta Hydropower Co Ltd — has begun environmental impact assessment works.

“We have awarded the contract to conduct the environmental impact assessment of Betan Karnali project to NEA Engineering Company, and it will be completed by 2019,” said Rauniar.

As per EPF, out of projected Rs 21 billion equity investment, 40 per cent will be mobilised from the member depositors, 15 per cent through institutional investment of EPF, 10 per cent from the generation company — Betan Karnali Sanchayakarta Hydropower Co Ltd, 10 per cent from Nepal Electricity Authority, 10 per cent share will be allotted to the (project-affected) locals and 15 per cent will be allotted to public through initial public offering.

The 425-megawatt peaking run-of-the-river project will be located in Surkhet district. The initial projected capacity of 688 megawatts has been reduced as the project is located upstream of high capacity 10,800 MW Karnali Chisapani Hydropower Project downstream. And the government has put forth its vision to develop the largest energy project in South Asia region.

In May 2017, the Ministry of Energy, Water Resources and Irrigation had granted approval to EPF to construct the Betan Karnali hydropower project through its own resources. Japan International Cooperation Agency had conducted a survey of the project in 1982, and had mentioned that the 688-megawatt hydel project is a low-cost, high-capacity project.