Officials of security agencies' welfare funds also invited
KATHMANDU, Aug 26: Hoping to explore financing of hydropower projects using 'domestic resources', Minister for Energy Janardan Sharma has started deliberations with the lending institutions.
Sharma told Republica that he has invited executives of Nepal Telecom (NT), Citizens Investment Trust (CIT), Employees' Provident Fund (EPF) and security agencies to his ministry on Friday to discuss tapping their vast cash reserves to finance hydropower projects.
Talking to Republica, Sharma said he will first discuss with lenders to learn about their interests and priorities before asking them to inject funds into hydropower projects. However, people from bank and financial institutions were not among those invited.
NT, CIT and EPF have already invested in different projects including the Upper Tamakoshi Hydropower Project.
Officials of the Social Security Fund and welfare funds of Nepal Army, Nepal Police and the armed police force have also been invited for the discussions. Security agencies are not allowed to invest in profit-making projects. But the agencies, particularly Nepal Army, have been lobbying the government about investing in such projects. These institutions have over Rs 150 billion in combined cash reserves that can be invested in hydropower projects, both as equity investment and loan investment, experts say.
The minister said he will prepare priority projects to inject domestic funds into after holding discussions with key lenders of these institutions. He, however, declined to make names of particular projects public before more homework is done. Sharma assumed office last week. "I will select the projects based on their priorities first," he said.
In a press meet on Tuesday, Sharma had said that projects like Buddhigandaki, Nalsinggadh, West Seti, Sunkoshi III and Tamor are the priority ones. The 1,200 MW Budhigandaki project is ready for starting construction but the financing modality, as well as the implementing agency, are still undecided.
Be prepared to invest in a hydro project, army chief told
Energy Minister Janardan Sharma on Tuesday said that he had asked Nepal Army to be prepared to invest in a major hydropower project.
"I have already telephoned the Chief of Army Staff of Nepal Army Rajendra Chhetri about making needful preparations to invest in a major hydropower project by using their funds."
Nepal Army says its welfare fund has about Rs 33 billion in cash reserves, including fixed deposits in different bank and financial institutions.
Nepal Army has already filed an application for the license of 12.25 MW Madikhola Hydropower Project of in Rolpa to develop a project, but whether this will be considered is still undecided.
Talking to Republica, Sharma said the government wanted not only to use the money from Nepal Army's welfare fund but also wanted to take advantage of its technical manpower and discipline culture to build the plants on time.
However, it is a fact that Nepal Army has not yet developed any hydropower projects nor does it have any technical expertise and a move to allow security agencies has sparked fear that it could deviate the army from its core purpose into doing business.