Jun 9, 2018-Upper Tamakoshi Hydropower Company is preparing to issue 25 percent of its shares to project affected locals and the general public. The company is the developer of the 456 MW Upper Tamakoshi Hydropower Project located in Dolakha district in eastern Nepal.
On Wednesday, Upper Tamakoshi Hydropower Company obtained permission from the Securities Board of Nepal (Sebon), the regulator of the securities market, to make an initial public offering of its shares. The company has already filed an application for registration at the Company Registrar Office (CRO) and expects to get its approval within a week.
According to the company, it will be registered at the CRO within a week, making it eligible to issue shares.
The hydropower company plans to issue shares to project affected locals in a few weeks. Subsequently, it will issue shares to the general public.
The hydropower company is a subsidiary of state-owned power utility Nepal Electricity Authority (NEA). It has set aside 10 percent of the shares for project affected locals in the district and 15 percent for the general public. The company expects to complete the share issuance within a month, according to project spokesperson Ganesh Raj Neupane.
As per the company’s allotment plan, 10.59 million ordinary shares worth Rs1.05 billion will be offered to Dolakha locals. Likewise, the general public can apply for 15.88 million ordinary shares worth Rs1.58 billion.
Project affected locals have to apply for a minimum of 30 shares each while the maximum has been fixed at 300 shares. The residents have been categorized into three classes: severely affected, moderately affected and less affected.
The highest number of shares have been set aside for the severely affected, and the moderately affected and less affected will get progressively fewer shares.
Members of the general public have to buy a minimum of 10 shares. There is no upper limit for them.
Meanwhile, around 95 percent of the construction work at the Upper Tamakoshi Hydropower Project has been completed. However, it is likely to miss its completion deadline as the Indian contractor assigned to execute the hydro-mechanical works has been working very slowly.
At least one of the plant’s six turbines should be churning out power by December 2018 as per the deadline set by the government. The entire project needs to come online by April 2019. But that does not look like happening.
The company has said it will be difficult to complete the project within the deadline due to dillydallying by the Indian contractor Texmaco Limited. As part of the hydro-mechanical works, the Indian company needs to build gates at the intake of the dam and fit the penstock pipe in the tunnel.
Although the contractor is constructing the gates at the intake, it is yet to start installing the penstock pipes. The penstock pipes deliver water from the dam into the turbines in the powerhouse to generate electricity. Although Upper Tamakoshi Hydropower Company has been putting pressure on the Indian contractor to speed up construction, its performance has not improved.