Kathmandu: After years of ups and downs on the development modality of Budhi Gandaki Hydropower Project, the government has decided to advance this national pride project in a company model.

The new company shall have seven-member board of directors including three from the government comprising Energy Secretary and two joint-secretaries one each from Energy Ministry and Finance Ministry, Managing Director of Nepal Electricity Authority (NEA) and independent board of directors. The tenure of the board of directors shall be five years.

A meeting of the Council of Ministers held on Tuesday took a decision on this reservoir-based project with the capacity of 1,200 megawatt at the proposal of the Ministry of Energy, Water Resource and Irrigation.

The project was stalled for a long time due to a delayed decision whether to construct the project with domestic investment or giving it to some foreign companies.

A French company handed over the detailed project report of Budhi Gandaki in 2014. Since then, the government has distributed almost Rs 40 billion in compensation for the land acquisition.

A 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).

Earlier, speaking at the National Assembly meeting on Monday, Minister for Energy Pampha Bhusal had said that the government is working to construct this hydel project in a company model.

A Memorandum of Association prepared by the Ministry of Energy, Water Resources and Irrigation (MOEWRI) 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 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 divest to local people and the general public.