Numbur Himalaya Hydropower’s long term banking facility worth Rs.3.33 Arba graded by Care Ratings Nepal

Sun, Mar 29, 2020 1:26 PM on Credit Rating, External Media, Latest, Others,
Numbur Him...

CARE Ratings Nepal Limited (CRNL) has assigned rating of ‘CARE-NP BB’ to the long-term bank facilities of Numbur Himalaya Hydropower Private Limited (NHHPL) worth NPR 3334 Million.

The ratings assigned to the bank facilities of NHHPL is constrained by project implementation and associated stabilization risk, power evacuation risk and NHHPL’s exposure to regulatory risk. The rating is also constrained by NHHPL’s exposure to volatile interest rates and hydrology risk associated with run of the river power generation.

The rating, however, derives strength from strong promoters & experienced management team and moderate counter party risk. The ratings also factors in achievement of financial closure for full project cost, presence of power purchase agreement (PPA) with sufficient period coverage, shortage of power at present coupled with increasing demand of power in the country and government support for the power sector.

The ability of NHHPL to timely complete the project without any time or cost overrun and timely completion of transmission infrastructure are the key rating sensitivities.

Numbur Himalaya Hydropower Private Limited (NHHPL) is a Private Limited company, incorporated as on August 21, 2007. It is promoted by individual promoters majorly related to MV Dugar group which has investments in other institutes which includes Banks, Construction company and Automobiles trading for setting up of a 24.2 MW run-of-river, Likhu A Hydropower Project (LAHP) in Solukhumbu and Ramechhap district of Nepal. MV Dugar Group is developing three hydropower projects including LAHP in Likhu river adjacently. The project is constructed under BOOT (Build, own, Operate and Transfer) mechanism. As per the Generation License, from Government of Nepal – Ministry of Energy, obtained as on November 2, 2015 the project shall be handed, on whatever conditions the project is, to the Government of Nepal after expiry of Generation License, which is 35 years.

Source: Care ratings Nepal