Employees Provident Fund (EPF) set to invest Rs 12b in Upper Tamakoshi

Employees Provident Fund (EPF) set to invest Rs 12b in Upper Tamakoshi
eKantipur.com, 7-Jan-08
BY BIKASH SANGRAULA

The Employees Provident Fund (EPF) on Monday decided to invest Rs 12 billion in the 309-megawatt (MW) Upper Tamakoshi hydroelectric project. A board meeting of the EPF took the decision Monday morning, said EPF General Manager Shahi Bikram Rana.

"We have sent out the green signal," said Rana after the meeting. "We are willing to extend Rs 10 billion in loan and invest a further Rs 2 billion in equity through purchase of debentures convertible later into shares."

EPF fowarded the decision, along with its conditions, to Nepal Electricity Authority (NEA) Monday afternoon. The NEA board will now have to take a decision in this regard, after which a memorandum of understanding (MoU) would be signed.

Conditions
The EPF has set nearly a dozen conditions for the investment. The major conditions are that a majority of shares of the project should remain with NEA; Upper Tamakoshi project as well as other NEA property be set up as collateral for the loan; shares reserved for locals of Dolakha district where the project is to be constructed; and there be comprehensive insurance for the investment.

"NEA board will take a decision on this as soon as possible," said Arjun Kumar Karki, NEA managing director.

"After signing the MoU with them, we will expedite negotiations with bankers, Rastriya Beema Sansthan and Citizens' Investment Fund," said Karki.

The project's total estimated cost is Rs 27 billion.

NEA has conducted preliminary dialogues to rope in Rs 5 billion in loan from banks, Rs 2 billion from the Rastriya Beema Sansthan and Rs 1 billion from the Citizens' Investment Fund.

The remaining Rs 9 billion will be equity, of which Rs 4.5 billion will come from NEA and the government of Nepal. Of the remaining Rs 4.5 billion, EPF has agreed on equity participation of Rs 2 billion, while the rest will come from local shareholders, Karki said.

The project
Upper Tamakoshi project site is located in the northern part of Dolakha district. The run-of-river project has natural dams, making the project the cheapest in the country in terms of per unit production cost of electricity.

Also, the project's location in central Nepal will help ease the power generation imbalance in a country where almost all projects are located in the western parts.

NEA, which holds the license for the project, plans to complete construction of the project by 2012/13 for selling power entirely in Nepal, according to NEA deputy managing director Uttar Kumar Shrestha.