Long term and short term loans of Himalayan Power Partner rated BB and A4 by CARE Ratings Nepal; Project constructed under BOOT mechanism

Fri, Feb 14, 2020 1:11 PM on Credit Rating, Latest,
Long term...

CARE Ratings Nepal Ltd. (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 Himalayan Power Partner Limited (HPPL).

 Key Rating Weaknesses

  • Significant time and cost overrun
  • Exposure to volatile interest rate
  • Project implementation and stabilization risk
  • Hydrology risk associated with run-of-the-river power generation
  • Geological risk
  • Power evacuation risk

Key Rating Strengths

  • Strong promoters with reputed board members and experienced management team
  • Power purchase agreement with sufficient period coverage
  • Moderate counter party risk
  • Low estimated project cost including financial closure achieved for major portion of debt and equity has been injected fully
  • Shortage of power at present coupled with increasing demand of power in the country
  • Government support for the power sector

About the Company

HPPL is a public limited company, incorporated on July 7, 2013. The company is developing 27 MW run- of- river, Dordi Khola Hydropower Project (DKHP) in Lamjung district of Nepal. The project is constructed under BOOT (Build, own, Operate and Transfer) mechanism. As per the Generation License, obtained on July 7, 2011 the project shall be handed, on whatever condition the project is, to the Government of Nepal after expiry of Generation License, which is 35 years. It is promoted by institutional as well as individual promoters from different background. The company is listed on Nepal Stock Exchange. NRN Infrastructure and Development Ltd. (35.70% stake), and individual/institutions related to IME group which includes Mr. Chandra Prasad Dhakal (7.20% stake), Worldwide Investment Pvt. Ltd. (6.96% stake), and Usha Investment Pvt. Ltd. (4.65% stake) are the major promoter shareholders of the company.

Source: https://careratingsnepal.com/

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