Non-Resident Nepali AssociationNon-Resident Nepali Association33rdrd NRN APAC Regional Meet 2013, Manila NRN APAC Regional Meet 2013, Manila

Hydropower Investment in Hydropower Investment in Development of NepalDevelopment of Nepal

Rameshwar ShahRameshwar Shah

Vice PresidentVice President

Non-Resident Nepali Association, International Coordination Non-Resident Nepali Association, International Coordination CouncilCouncil

“for NEPALI by NEPALI"

Background:Background: 10 years of Diaspora10 years of Diaspora 3.2mn NRN’s in over 100 countries, over 90% in 3.2mn NRN’s in over 100 countries, over 90% in

Foreign Employment Foreign Employment $5bn Remittance, >92% used in domestic cause$5bn Remittance, >92% used in domestic cause Emerging Need for overall economic development.Emerging Need for overall economic development. NRN’s voice for Collective InvestmentNRN’s voice for Collective Investment NRB Governor formed High level TF in January NRB Governor formed High level TF in January

2011 to identify the GAP in law and recommend 2011 to identify the GAP in law and recommend amendment in legal provisions to allow NRN’s to amendment in legal provisions to allow NRN’s to bring investment collectively.bring investment collectively.

“for NEPALI by NEPALI"

Background:Background: High Level TF recommendation to the NRB and High Level TF recommendation to the NRB and

SEBON.SEBON. 55THTH NRN Global Conference confer investment in NRN Global Conference confer investment in

100MW hydropower project in Nepal by NRN’s.100MW hydropower project in Nepal by NRN’s. ICC decision to pursue Collective Investment ICC decision to pursue Collective Investment NRNA Executive started Collective Investment NRNA Executive started Collective Investment

campaign in various countries and regions using campaign in various countries and regions using their global networktheir global network

“for NEPALI by NEPALI"

The Investment Company:The Investment Company: NRN’s formed an Investment Company in Nepal in NRN’s formed an Investment Company in Nepal in

September 2013September 2013 Some 785 investors, including 3 FDI and 4 local Some 785 investors, including 3 FDI and 4 local

company subscribed for nearly Rs. 1bn investmentcompany subscribed for nearly Rs. 1bn investment 25% of the commitment amount was called and 25% of the commitment amount was called and

received ending Feb 2013.received ending Feb 2013. Some 18 hydropower project was identified and Some 18 hydropower project was identified and

analyzedanalyzed NRNIL acquired 51% stake in 27MW Dordi Khola NRNIL acquired 51% stake in 27MW Dordi Khola

Hydropower Project in Lamjung. Hydropower Project in Lamjung.

“for NEPALI by NEPALI"

Dordi Khola Project: 27MWDordi Khola Project: 27MW 4 years Project period, 142.32GWh Energy, 4.3bn project 4 years Project period, 142.32GWh Energy, 4.3bn project

cost, IRR 13.1%, RoE 16.9%, Simple Pay back <6yrs.cost, IRR 13.1%, RoE 16.9%, Simple Pay back <6yrs. Project work is continuing, DPR is expected end May.Project work is continuing, DPR is expected end May. Land acquisition work is going on. Land acquisition work is going on. Banks are engaged, financial closure is expected mid July. Banks are engaged, financial closure is expected mid July. Interaction Program and project site visit are organized.Interaction Program and project site visit are organized. Nepali media are keenly covering project progress update Nepali media are keenly covering project progress update

situated under Dordi Khola corridor. situated under Dordi Khola corridor. Our web site can be visited for the. The site link is: 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.http://nrnil.com/index.php?option=com_content&view=article&id=94&Itemid=478.

“for NEPALI by NEPALI"

NRNIL work update:NRNIL work update: Necessary appointments such as: BOD, MD, Auditor, CS, Necessary appointments such as: BOD, MD, Auditor, CS,

office staff are done. Office is working smoothly.office staff are done. Office is working smoothly. Engineering and Consulting Team selection in processEngineering and Consulting Team selection in process Team is working on to get share lagat certified from ROCTeam is working on to get share lagat certified from ROC Issuance of Share Certificate to the investors in process.Issuance of Share Certificate to the investors in process. NRNIL team is continuously working with government NRNIL team is continuously working with government

authorities and hydro engineering consulting team to authorities and hydro engineering consulting team to secure other projects which will aggregate to 100MW.secure other projects which will aggregate to 100MW.

All un-invested money has been kept under call account. All un-invested money has been kept under call account. This now earns some 9% interest annually, the return. This now earns some 9% interest annually, the return.

“for NEPALI by NEPALI"

The Strategy:The Strategy: Government has cancelled some 672 hydropower Government has cancelled some 672 hydropower

project licenses recently.project licenses recently. Many more license cancellation is on the way…Many more license cancellation is on the way… This is to invite and facilitate real investors in This is to invite and facilitate real investors in

Hydropower sector instead, Hydropower sector instead,

““Jhola ma Khola ko satta khola bat bidhyut”Jhola ma Khola ko satta khola bat bidhyut”

We have taken strategy to go for fresh licenses.We have taken strategy to go for fresh licenses. This is to avoid possibility of unsupported expense This is to avoid possibility of unsupported expense

and/or premium payment. and/or premium payment.

“for NEPALI by NEPALI"

my Perspective:my Perspective: In my perspective, Hydropower is the best sector for In my perspective, Hydropower is the best sector for

all type of investors. It’s a risk free investment!-all type of investors. It’s a risk free investment!-HOW??HOW??

सं�सं�रको� संबभन्दा� अप्ठे� र� को�म भने�को� उत्पा�दाने बिबबि�ने�हो�सं�सं�रको� संबभन्दा� अप्ठे� र� को�म भने�को� उत्पा�दाने बिबबि�ने�हो�, , तर ने�पा�लको� तर ने�पा�लको� जलबि�धु�त एकोम�त्र एउटा� यस्त� क्षे�त्रहो� जसंको� उत्पा�दा बिबबि�को� बिनेश्चि'(तत� जलबि�धु�त एकोम�त्र एउटा� यस्त� क्षे�त्रहो� जसंको� उत्पा�दा बिबबि�को� बिनेश्चि'(तत� उत्पा�दाने हुने� अगा�ब�ने� तय हुने�गार�को�छउत्पा�दाने हुने� अगा�ब�ने� तय हुने�गार�को�छ, , अर्था�-त. अर्था�-त.

Guaranteed RevenueGuaranteed Revenue Government subsidy: Tax and Custom RebateGovernment subsidy: Tax and Custom Rebate Long term return-30 yearsLong term return-30 years Easy financing- prioritized sector, must finance senario, low Easy financing- prioritized sector, must finance senario, low

interest rate.interest rate.

æg]kfnLsf nflu g]kfnLÆ “for NEPALI by NEPALI"

Thank you…Thank you…