KATHMANDU, August 20: Dolma Impact Fund, a private equity fund from Europe, has now become a shareholder of Swet Ganga Hydropower & Construction Public Limited Company, promoted by Sanima Hydro Group, as a foreign investor.
The Dolma Fund, a British private equity investor, is the first international private equity and impact fund dedicated to investing in Nepal. It has invested US$ 3.2 million in equity investment in Lower Likhu Hydropower Project of 28.1 MW, a project developed by Swet Ganga. The project’s estimated cost is about Rs 5 billion and the construction works have already started.
The Funds' founder Tim Gocher received a certificate of 3.2 million units of shares from the chairman of Swet Ganga Hydropower and Construction Public Limited, Binay Kumar Shrestha, on Thursday in Kathmandu.
The Fund’s investment manager Shabda Gyawali said that their investment will be divested after the three-year lock period after issuance of initial public offering (IPO) of the company’s shares.
“This investment in a private company is for empowering the private sector, and also for creating jobs,” added Gyawali. The process for IPO has not yet started, but company officials said it has to fulfill several criteria before starting the process to be listed on the stock exchange.
The Sanima Hydro group has already built three hydropower projects including Mai Hydropower Project of 22 MW.
Subarna Das Shrestha, CEO of Sanima Mai Hydropower Company, told Republica that though the investment amount was small, it was significant it was their first exposure to international investors.
Shrestha said they wanted to dedicate themselves to hydropower development.
“We are really interested to expand our investment portfolio and bring more foreign investments from those companies that have proven track records,” he added.
Officials of the Sanima Group also said that this investment has become possible particularly as the Dolma Fund accepted Power Purchase Agreement in Nepali Currency.
“This is also a lesson learned for us on several fronts because we have to fulfill several requirements including proper documentation, legal requirements, and execution of all the tasks in a planned way within a specified timeframe, among others,” Shrestha added.
The Dolma Fund has an investment commitment of US$ 26 million in Nepal.
It has already invested in one hydropower, a pharmaceutical, an IT company, and few other investments are in the pipeline. The Fund has to divest all its investments by 2024.
The Fund started its investment by injecting a fund of $1.13 million in Suri Khola Hydropower Project (6.4 MW) in Dolakha in March 2016. It's next investment of $3.5 million is in an IT company, Cloud Factory Group.
It is also investing in a pharmaceutical company Rhododendron Biotech Pvt Ltd; however, the amount is not yet disclosed.