CARE Ratings Nepal Limited (CRNL) has assigned rating of ‘CARE-NP BB+’ to the long-term bank facilities and ‘CARE-NP A4+’ to the short-term bank facilities of Mountain Energy Nepal Limited (MENL).
Key Rating Weaknesses
- Project implementation and stabilisation risk
- Current project operated at low PLF
- Hydrology risk associated with run-of-the-river power generation
- Exposure to volatile interest rate
Key Rating Strengths
- Experienced promoter and management team
- Track record in operating hydro power project
- Power purchase agreement with sufficient period coverage
- Moderate counter party risk
- Financial closure achieved for the project cost, relatively low cost per MW
- Shortage of power at present coupled with increasing demand of power in the country
- Government support for the power sector
- Major developments towards Power Evacuation
About the Company
Mountain Energy Nepal Limited (MENL) is a public limited company promoted by business persons having experience in the hydropower sector. MENL earlier had two subsidiaries companies namely Aadhi Shakti Bidhyut Bikash Company Limited (ASBL) and Robust Energy Limited (REL) which were acquired by MENL during FY19. ASBL was involved in the operation of 5MW run-of-the-river Tadi Khola Hydroelectric Project (TKHEP) at Tadi Rural Municipality, Nuwakot District which has been in commercial operation since April 2013. REL was involved in the construction of 42MW MKHEP, Required Commercial Operation Date (RCOD) of which was December 31, 2019 and is expected to be revised till May 2020. The projects are under BOOT (Build, own, Operate and Transfer) mechanism. As per the Generation License, from Government of Nepal – Ministry of Energy, the projects shall be handed, on whatever conditions the project is, to the Government of Nepal after expiry of Generation License, which is 35 years.
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