Hydroelectricity Investment and Development Company Limited (HIDCL) has been allowed to participate in consortium financing by the central bank.
In the financial world, a consortium refers to several lending institutions that group together to jointly finance a single borrower. A consortium may arise because the size of the project at hand is simply too large or too risky for any single lender to assume.
A meeting of the Board of Directors of NRB held on January 17 has decided to designate HIDCL as a financial institution to implement the provisions of the Banks and Financial Institutions Debt Recovery Act, 2058 (with amendments) as per Section 3 (d). With this, the company has been allowed to participate in consortium financing and has come under partial regulation of Nepal Rastra Bank.
NRB also issued instructions to commercial banks, development banks, and finance companies that only licensed financial institutions and HIDCL are allowed to participate in co-financing in the related sectors.