Govt to set up Hydropower Development Bank
KATHMANDU, JUN 05 -
With the shortage of financial resources always remaining one of the major constraints to the development of hydropower projects, the government on Saturday decided to establish Hydropower Development Bank to make available funds for large hydel projects.
According to Energy Minister Gokarna Bista, the decision was taken so as to ease the power crisis and avoid shortage of resources for small and large scale projects. “We’ve decided to establish Hydropower Development Bank to garner resources from all sources as domestic investment is not enough for mega projects,” said Minister Bista. The Saturday’s Cabinet meeting took a decision to this effect.
The government is planning to set up the bank by infusing seed money of Rs 14-15 billion and the rest from domestic and international financial institutions. However, Minister Bista said the bank’s capital size is yet to be decided. According to him, a six-member committee has been formed and it will decide the modality for the establishment of the bank. The committee headed by Surya Nath Upadhyaya, former commissioner of the Commission for the Investigation of Abuse of Authority (CIAA), will decide the capital size and working area of the bank. Other members of the committee include Nepal Rastra Bank (NRB) governor, energy secretary, finance secretary and law secretary.
Although domestic financial institutions are increasingly being involved in hydel projects, they still do not have adequate resources to finance medium and large scale projects. Therefore, the establishment of the bank is expected to provide relief to hydropower developers. As per NRB directives, all commercial banks can lend Rs 30 billion to hydropower projects that can produce 150 MW of electricity. Currently it costs Rs 180-200 million to produce 1 MW of electricity. “After the establishment of the bank, there will not be any problem for investment in large projects,” said Bista. After arranging resources from domestic commercial banks proved difficult, the much talked about 456 MW Upper Tamakoshi Hydroelectricity Project is being constructed with loans from government-owned institutions such as Employers’ Provident Fund (EPF), Nepal Telecom, Rastriya Beema Sansthan and Citizens’ Investment Trust. Now, these institutions can become shareholders of the proposed bank. Announcing ‘energy crisis’ in March, the government had said Rs 15 billion from these institutions could be provided to the power sector.
Source: Kantipur
With the shortage of financial resources always remaining one of the major constraints to the development of hydropower projects, the government on Saturday decided to establish Hydropower Development Bank to make available funds for large hydel projects.
According to Energy Minister Gokarna Bista, the decision was taken so as to ease the power crisis and avoid shortage of resources for small and large scale projects. “We’ve decided to establish Hydropower Development Bank to garner resources from all sources as domestic investment is not enough for mega projects,” said Minister Bista. The Saturday’s Cabinet meeting took a decision to this effect.
The government is planning to set up the bank by infusing seed money of Rs 14-15 billion and the rest from domestic and international financial institutions. However, Minister Bista said the bank’s capital size is yet to be decided. According to him, a six-member committee has been formed and it will decide the modality for the establishment of the bank. The committee headed by Surya Nath Upadhyaya, former commissioner of the Commission for the Investigation of Abuse of Authority (CIAA), will decide the capital size and working area of the bank. Other members of the committee include Nepal Rastra Bank (NRB) governor, energy secretary, finance secretary and law secretary.
Although domestic financial institutions are increasingly being involved in hydel projects, they still do not have adequate resources to finance medium and large scale projects. Therefore, the establishment of the bank is expected to provide relief to hydropower developers. As per NRB directives, all commercial banks can lend Rs 30 billion to hydropower projects that can produce 150 MW of electricity. Currently it costs Rs 180-200 million to produce 1 MW of electricity. “After the establishment of the bank, there will not be any problem for investment in large projects,” said Bista. After arranging resources from domestic commercial banks proved difficult, the much talked about 456 MW Upper Tamakoshi Hydroelectricity Project is being constructed with loans from government-owned institutions such as Employers’ Provident Fund (EPF), Nepal Telecom, Rastriya Beema Sansthan and Citizens’ Investment Trust. Now, these institutions can become shareholders of the proposed bank. Announcing ‘energy crisis’ in March, the government had said Rs 15 billion from these institutions could be provided to the power sector.
Source: Kantipur
