Laxmi Capital News
Innovative ways of financing for hydels sought

Experts andindustry insiders have called for more optimisations and innovative ways offinancing in the country’s hydropower sector.

Speaking at apanel discussion on ‘FDI in Nepal’s Power Sector’ during the Nepal PowerInvestment Summit, which kicked off in the Capital today, hydropower developerssaid that there are no ways other than attracting foreign investment in Nepal’spower landscape to boost economic growth of the country.

“However, sincehydropower projects are capital intensive and have longer gestation period,innovative financing solutions like equity financing is the need of time,” saidRajen Kandel, director of Kandel Group.

According to him,lack of investment opportunity within Nepal and the growing demand of energyevery day offers high level of investment scope for international investors tobuild hydropower projects in Nepal.

Similarly, N LSharma, chairman of India-based Satluj Jal Vidyut Nigam (SJVN), pointed out politicalinstability, lack of tax incentive, hassles during the land acquisition processand clearance of forest, and environment as some factors hindering foreigndirect investment (FDI) in Nepal’s energy sector. Informing that the Arun III,which is a 900-megawatt hydropower project financed by SJVN, was soon kickingoff, he suggested government to make sure to develop transmission lines beforethe completion of any hydropower project.

Meanwhile,speakers at the discussion panel also called for an independent power sectorregulator to check the demand and supply side situation as well as to fix theenergy tariff in the country.

Apar Neupane,vice-president of Finance at Equicap Asia Pvt Ltd, opined that the mismatch inthe interests of several stakeholders was the biggest hindrance for attractingFDI to Nepal. “From the government to the project affected area, from thedeveloper to the contractor and financier, there are multiple stakeholdersinvolved and they all have their own interests. When interests collide, theproject gets affected,” he stated.

Meanwhile, JosephHoess, director of Dragon Capital, Vietnam, said that the hassles that foreigninvestors have to go through while doing the ground works were what wasaggravating the situation. “Private investors seek maximum returns within ashort period of time, but here in Nepal we have to invest for more than fiveyears doing basic things like getting approvals and clearances,” he informed.

Organised by theEnergy Development Council (EDC), the three-day long summit aims to introduceNepal as a safe investment space in the hydropower sector.

A total of 350delegates from 24 countries including those from SAARC region, Europe, China,Korea and the US, among others are participating in the event that will lasttill Monday, according to the organisers.

Source: The HimalayanTimes, 28th January 2018
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