Electricity Regulatory Commission appeals to Governor for refinancing provisions for Hydro Companies

Fri, Oct 18, 2019 1:16 PM on Economy, Latest, Stock Market,

Electricity Regulatory Commission, the Electricity sector regulator of Nepal, has written a letter to the Governor of Nepal Rastra Bank to appealon behalf of private hydropower companies of Nepal.

The letter states the current state of Hydropower sector in Nepal. The prices of many HEP Companies listed in NEPSE have gone below par which shows the declining trust of the public in the sector.

Therefore, the commission has requested NRB to provide refinancing provisions for Hydropower companies, which will significantly bring down the cost of funds.

The Government of Nepal has targeted 15k MW electricity production by the next ten years. This plan will approximately require an investment of Rs 50 kharba in the coming 10 years. So even if the government invests 25%, 75% of investment expectation falls on the shoulder of the Private sector.

So far, around Rs 7 kharba has already been invested. In the upcoming projects if the public-private-partnership (PPP) model can be implemented, along with private and foreign investment, then the target is achievable.

Therefore, if the projects can take re-financed loans from institutions such as Hydro Electricity And Development Company then the service charge can be brought down to 0.25%. This will increase the cost-effectiveness of HEPs.

It has requested to make necessary provisions to avail re-financing facilities at 3%.