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Non-Resident Nepali Association 3 rd NRN APAC Regional Meet 2013, Manila Hydropower Investment in Development of Nepal. Rameshwar Shah Vice President Non-Resident Nepali Association, International Coordination Council. Background:. 10 years of Diaspora
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Non-Resident Nepali Association3rd NRN APAC Regional Meet 2013, ManilaHydropower Investment in Development of Nepal Rameshwar Shah Vice President Non-Resident Nepali Association, International Coordination Council
Background: • 10 years of Diaspora • 3.2mn NRN’s in over 100 countries, over 90% in Foreign Employment • $5bn Remittance, >92% used in domestic cause • Emerging Need for overall economic development. • NRN’s voice for Collective Investment • NRB Governor formed High level TF in January 2011 to identify the GAP in law and recommend amendment in legal provisions to allow NRN’s to bring investment collectively.
Background: • High Level TF recommendation to the NRB and SEBON. • 5TH NRN Global Conference confer investment in 100MW hydropower project in Nepal by NRN’s. • ICC decision to pursue Collective Investment • NRNA Executive started Collective Investment campaign in various countries and regions using their global network
The Investment Company: • NRN’s formed an Investment Company in Nepal in September 2013 • Some 785 investors, including 3 FDI and 4 local company subscribed for nearly Rs. 1bn investment • 25% of the commitment amount was called and received ending Feb 2013. • Some 18 hydropower project was identified and analyzed • NRNIL acquired 51% stake in 27MW DordiKhola Hydropower Project in Lamjung.
DordiKhola Project: 27MW • 4 years Project period, 142.32GWh Energy, 4.3bn project cost, IRR 13.1%, RoE 16.9%, Simple Pay back <6yrs. • Project work is continuing, DPR is expected end May. • Land acquisition work is going on. • Banks are engaged, financial closure is expected mid July. • Interaction Program and project site visit are organized. • Nepali media are keenly covering project progress update situated under DordiKhola corridor. • Our web site can be visited for the. The site link is: http://nrnil.com/index.php?option=com_content&view=article&id=94&Itemid=478.
NRNIL work update: • Necessary appointments such as: BOD, MD, Auditor, CS, office staff are done. Office is working smoothly. • Engineering and Consulting Team selection in process • Team is working on to get share lagat certified from ROC • Issuance of Share Certificate to the investors in process. • NRNIL team is continuously working with government authorities and hydro engineering consulting team to secure other projects which will aggregate to 100MW. • All un-invested money has been kept under call account. This now earns some 9% interest annually, the return.
The Strategy: • Government has cancelled some 672 hydropower project licenses recently. • Many more license cancellation is on the way… • This is to invite and facilitate real investors in Hydropower sector instead, “Jhola ma Kholakosattakhola bat bidhyut” • We have taken strategy to go for fresh licenses. • This is to avoid possibility of unsupported expense and/or premium payment.
my Perspective: • In my perspective, Hydropower is the best sector for all type of investors. It’s a risk free investment!-HOW?? संसारको सबभन्दा अप्ठेरो काम भनेको उत्पादन बिक्रिनैहो, तर नेपालको जलविधुत एकमात्र एउटा यस्तो क्षेत्रहो जसको उत्पाद बिक्रिको निश्चितता उत्पादन हुनु अगाबैनै तय हुनेगरेकोछ, अर्थात् • Guaranteed Revenue • Government subsidy: Tax and Custom Rebate • Long term return-30 years • Easy financing- prioritized sector, must finance senario, low interest rate.
