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October 07: The government has approved the structure of the proposed Bidyut Utpadan Company Limited. The cabinet meeting held on October 6 took the decision. The establishment of such entity has long been deemed necessary for the development of storage-type hydel projects.
“The company will be established with a 29 percent share investment of the general Public, residents of the project affected districts and highly marginalized citizens,” said Energy Minister Janardan Sharma. The structure of the company has been approved for the implementation of National Energy-Crisis Minimisation Workplan along with other short-term and long-term plans.
The establishment of the company has been granted permission as an autonomous entity as per the Companies Act, 2063. The company will have Rs 30 billion in paid-up capital, Rs 20 billion in authorised capital of, Rs 10 billion in issued capital and Rs 2 billion as capital pledged by the promoter.
The company will be constructing the 410MW Budhigandaki Project, 245 MW Naumure Project, 536 MW Sunkoshi III Project and 900MW Karnali Project. The structure of the company was approved after some changes in the proposed stake composition by the Ministry of Energy. The ministry earlier proposed a 23 percent share to the general public which has been reduced to 17 per cent. Similarly, the share of Nepal Telecom has been increased to 10 percent from four percent.
Hedging fund for minimising risks
Earlier on October 4, energy minister Sharma shared some of the important steps to facilitate the hydropower development. Speaking at a conference, he said that the government is preparing to establish a hedging fund in order to minimise the risks associated to the fluctuation in forex rates during the time of power purchase agreements (PPAs) in US Dollar with the developers of the projects. He also informed about the simplification of licensing and PPA procedures, government decision to construct some projects of NEA through subsidiary companies and large scale expansion of transmission lines.
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