Hydropower dev bank to have Rs 30b paid-up capital

KATHAMNDU, JUN 28 -

The proposed hydropower development bank will have a paid-up capital of Rs 30 billion. A committee formed to prepare the modality for the bank has suggested that the bank’s authorised capital should be Rs 100 billion and paid-up capital Rs 30 billion.

The Energy Ministry has demanded that the government allocate Rs 15 billion as seed money for the bank in the next fiscal year’s budget. “We’ve asked the government to allocate Rs 15 billion in the budget,” said Energy Minister Gokarna Bista, adding that fund requests have also been made to other investors such as Employees Provident Fund, Nepal Telecom and Rastriya Beema Sansthan.

The ministry has said that the government’s stake in the proposed bank will be around 20-30 percent. “We want more participation from the private sector,” said Bista. “We will limit the government stake at 30 percent.”

As per the modality, the board of the proposed bank will consist of the central bank governor, finance secretary and private sector representatives.

With the shortage of financial resources always remaining one of the major constraints to the development of hydropower projects, the government on June 5 had decided to set up the bank to make funds available for large hydel projects. The decision was taken so as to ease the power crisis and avoid any shortage of resources for small and large scale projects as the domestic investment is not enough for mega projects.

Even if all commercial banks are put together, they can only lend for the production of up to 150 MW of electricity. 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.

The proposed bank will primarily mobilise soft loans provided by major donors such as the World Bank and Asian Development Bank. As per the plan, the bank will provide loans received from the donors at low interest rate to hydropower developers at higher interest rate.

The ministry has also forwarded a 25-year hydropower development policy to the Prime Minister’s Office so that it can be incorporated in the government’s annual policies and programmes. President Ram Baran Yadav is scheduled to present the government’s annual policies and programmes in the Legislature Parliament on July 13.

The ministry is planning to waive the installation cost of electricity to poor and dalits. It is also planning to make city roads free of load-shedding. According to Bista, a separate feeder will be installed for electricity supply on the roads.

Posted on: 2011-06-28 08:57
http://www.ekantipur.com/2011/06/28/business/hydropower-dev-bank-to-have-rs-30b-paid-up-capital/336414.html