News Article

Proposal to establish public company to build Budhi Gandaki in cabinet

By Republica

Published: June 27, 2022 02:30 PM

KATHMANDU, June 27: Minister for Energy, Water Resources and Irrigation Pampha Bhusal has taken a proposal to cabinet to open a public company for the construction of 1,200 MW Budhi Gandaki Hydropower Project.

Speaking at a workshop organized in the capital on Sunday, Minister Bhusal said that a proposal to establish ‘Budhigandaki Hydropower Development Company Limited’ has been submitted to the Council of Ministers. Earlier, the Ministry of Finance and the Ministry of Law, Justice and Parliamentary Affairs suggested that the Budhi Gandaki Hydropower Project could be constructed through a public company.

The proposal was taken to the cabinet in line with the suggestions of the finance and law ministries.

A Cabinet meeting held on April 7 had decided to build the Budhi Gandaki hydropower project with domestic investment by scrapping the license awarded to the Chinese company- China Gezhouba Group Corporation (CGGC). It is also mentioned in the budget of FY 2022/23 that this project will be constructed from internal sources.

The Memorandum of Association prepared by the Ministry of Energy, Water Resources and irrigation (MOEWRI) states that the authorized capital of the proposed company will be Rs 10 billion. According to the memorandum of Association of the company, its authorized capital will be divided into one billion ordinary shares at the rate of Rs 100 per share. The issued capital of the company will be Rs 40 billion.

The capital pledged by the founders of the company for immediate repayment will be Rs 20 billion. The Memorandum of Association of the company states that 400 million shares will be given to the Ministry of Energy, 250 million to the Ministry of Finance and 150 million shares to Nepal Electricity Authority. Similarly, 100 million share structures have been proposed to divest to local people and the general public.

The MOEWRI has already distributed around Rs 35 billion as compensation to acquire the land that is going to be affected by the project. The government has also collected Rs 71 billion for the project through infrastructure tax.

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