CARE Ratings Nepal Limited (CRNL) has reaffirmed rating of ‘CARE-NP BB’ to the long-term bank facilities of Taksar Pikhuwa Khola Hydropower Private Limited (TPKH) worth NPR 1200 Million.
The ratings assigned to the bank facilities of TPKH is constrained by project implementation and associated stabilization risk, high estimated project cost coupled with time overrun and TPKH’s exposure to regulatory risk. The rating is also constrained by TPKH’s exposure to volatile interest rates and hydrology risk associated with run of the river power generation.
The rating, however, derives strength from experienced board members and management, moderate counter party risk and government support for the power sector and low power evacuation 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.
The ability of TPKH to timely complete the project without any time or cost overrun and timely completion of transmission infrastructure are the key rating sensitivities.
Taksar Pikhuwa Khola Hydro Power Pvt. Ltd (TPKH) is a Private company, incorporated as on April 23, 2014. It is promoted by individual promoters from different background for setting up of an 8 MW run-of-river, Taksar Pikhuwa Khola Hydropower Project (TPKHP) in Bhojpur district of Nepal. The major shareholders of the company as on February 12, 2020 are Mr. Narayan Ballav Pant (24.41%) and Mrs. Anju Pant (16.36%). 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 June 17, 2016, 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