Mistri Khola is first venture for HIDC
KATHMANDU, NOV 07 -
The Mistri Khola Hydropower Project has become the first venture for Hydroelectric Investment and Development Company ( HIDC ). The company decided to invest in the 42 MW project located in Myagdi district after its risk management committee approved it for financing.
HIDC sources said it would be chipping in Rs 1 billion as a partner in the consortium of commercial banks led by Nabil Bank which is financing the project. Nabil Bank has pledged Rs 1 billion, Nepal Investment Bank Rs 700 million, Nepal Bank Rs 500 million, Laxmi Bank Rs 400 million, Clean Energy Bank Rs 300 million and other banks Rs 340 million.
Mistri Khola is expected to cost Rs 5.60 billion. The banks will finance 75 percent of its total cost while the promoters will invest the remaining amount. The project is estimated to be completed in the next four years. The company’s risk assessment committee submitted its report to energy secretary Hari Ram Koirala on Oct 20.
“After the project was found to be technically and financially viable, the committee approved the proposal,” said Koirala who also chairs the HIDC board.
He added that as per the risk assessment report, no risk factor has been found in the Mistri Khola project apart from uncertainty over timely construction of a transmission line to evacuate energy from it. An HIDC official said the company had written to the Nepal Electricity Authority (NEA) about building a power line.
“Despite the fact that there has been relatively little investment from the NEA to construct transmission lines, no project after coming online has suffered from lack of power lines,” said the official. “The NEA has promised to make proper arrangements to erect transmission lines once the project goes into the construction phase.”
According to officials involved in the risk assessment study, a 48-km transmission line is needed to evacuate power from the project to the national power grid. Two power lines have been planned — a 20-km line linking the project site and Rahughat and another 28-km line connecting Rahughat and Modi.
The rate of the power purchase agreement signed by the project with the NEA is Rs 5.40 per unit.
Meanwhile, the Employees Provident Fund (EPF) has lately shown interest in investing in the project, but it has made no formal decision in this regard.
Ejendra Luitel, coordinator of the company’s management team, said that once the banks finish arranging capital to finance the project, the final financing structure will be set up. “ HIDC will then sign a memorandum of understanding with the project.”
The central bank has allowed HIDC to finance hydropower projects identified by banks as a consortium partner initially while it gains technical expertise. The company recently came into operation with the objective of investing in hydropower projects with a capacity of more than 25 MW.
Source: The Kathmandu Post
