Kathmandu: The Budhi Gandaki Hydropower Project, which has been neglected for a long time under various pretexts, will now be constructed through a public company. A proposal has been made to build this project with a capacity of 1,200 MW in the company model with domestic investment.

According to the framework prepared by the Ministry of Energy, Water Resources and Irrigation (MOEWRI), a company called 'Budhigandaki Hydropower Development Company Limited' will be established to build this project. The ministry has prepared a Memorandum of Association and other necessary documents for the company and submitted them to the Ministry of Finance and Ministry of Law for financial and legal suggestions.

The Cabinet meeting held on April 7 had decided to build the Budhi Gandaki hydropower project with domestic investment by scrapping the license awarded to the Chinese company- China Gezhouba Group Corporation (CGGC). It is also mentioned in the budget of FY 2022/23 that this project will be constructed from internal sources.

Spokesperson for the Ministry of Energy, Water Resources and Irrigation, Madhu Prasad Bhetuwal informed Republica that the Memorandum of Association and other necessary documents have been prepared to build the Budhigandaki project in a company model and have been sent to the Ministry of Finance and Law for opinion and suggestions.

"The ministry has prepared the Memorandum of Association and other documents required for the establishment of the company and sent them to the finance and law ministries for suggestions," he told Republica. “Both the ministries are yet to give their feedback. The process will move forward after the feedback is received.”

Spokesperson Bhetuwal said that the work of establishing the company has not reached the final stage yet. If the finance and law ministries suggest to move the plan forward, the work of establishing the company will start.

The Memorandum of Association prepared by the Ministry of Energy states that the authorized capital of the proposed company will be Rs 10 billion. According to the memorandum of Association of the company, its authorized capital will be divided into one billion ordinary shares at the rate of Rs 100 per share. The immediate issued capital of the company will be Rs 40 billion.

The capital pledged by the founders of the company for immediate repayment will be Rs 20 billion. The Memorandum of Association of the company states that 400 million shares will be given to the Ministry of Energy, 250 million to the Ministry of Finance and 150 million shares to Nepal Electricity Authority. Similarly, 100 million share structures have been proposed to the local people and general public.

In the capital structure of the company prepared by the Ministry of Energy, it was said that only 250 million shares would be given to the energy ministry and 200 million shares to the finance ministry. In the first proposal, a proposal was made to give 100 million shares to the Ministry of Urban Development and 50 million shares to Bagmati and Gandaki provinces. But in the latest proposal, urban development, Bagmati and Gandaki provinces have not been included in the share allocation.

The government has given priority to this project in its policies and programs and budget for the coming Fiscal Year 2022/23. In the policies and programs, it has been said that the project will be constructed with domestic investment, while in the budget; it has been announced to move ahead with the construction work by managing the investment model and resources.