Nepal Electricity Authority (NEA) Moves Towards Owning Majority Shares in Budhigandaki Hydropower Project
Date: April 5, 2023
Nepal Electricity Authority (NEA) has initiated measures to gain a controlling stake in the Budhigandaki hydropower project, a project that has encountered numerous hurdles since its feasibility study in 1983/84.
The establishment of the Budhigandaki Hydropower Public Limited has helped resolve uncertainties and issues regarding the financial and operational modalities of the project. To address these issues, a taskforce has been formed under the coordination of the NEA’s deputy executive director Pradip Kumar Thike, which will recommend changes to the share structures of the project. The government’s decision to breathe new life into the project has ended the project’s long-standing stall.
The project is estimated to cost Rs 331 billion, and it has faced several challenges over the years. In 2017, the Ministry and the Chinese company, Gezhouba Group, signed a memorandum of understanding to proceed with the project. However, the government later decided to develop the project with domestic investments in 2018. Following the loss of contact with the Gezhouba Group, the government regained control of the Budhigandaki hydropower project in 2022 and established the Budhigandaki Hydropower Public Limited.
The authorized capital of the public company will be worth Rs 20 billion, and the issued capital will also be Rs 20 billion. Under the current arrangements, the Energy Ministry is set to own 50 percent of the remaining shares for public issuance, while the Finance Ministry and the NEA will hold 30 percent and 20 percent, respectively.
Conclusion: With the Nepal Electricity Authority taking a majority share in the Budhigandaki hydropower project, the long-standing issues related to the project’s financial and operational modalities are finally being addressed.
Stay tuned for more updates on the development of the Budhigandaki hydropower project in Nepal.