Upper Tamakoshi hydro IPO plans hit snag with localsThe Upper Tamakoshi Hydropower Project’s plan to issue 25 percent ordinary shares to project affected people has hit a snag with locals bickering for more shares.
The Upper Tamakoshi Hydropower Project’s plan to issue 25 percent ordinary shares to project affected people has hit a snag with locals bickering for more shares. The 456MW hydropower project being developed in Dolakha district was planning to launch an initial public offering equivalent to 25 percent of the stakes worth Rs2.63 billion by the end of March.
As mandated by District Coordination Committee (DCC) Dolakha, the project had categorised district locals into three groups—severely affected , moderately affected and least affected, with the first group getting the most shares.
But the project’s plan has come to a halt after some of the locals from the moderately affected category launched a protest demanding them to place in the severely affected category. Likewise, the locals that are categorised as least affected have demanded to be placed in the moderately affected category.
The recent development means the project which was in line to get approval from Securities Board of Nepal (Sebon), the regulator of the securities market will have to halt its plan for now. The Sebon has also asked the project office to resolve the issue with locals and re-apply for the IPO.
The project office said it was ready to make amendments in share allocation if it is mandated by the DDC. “We have asked the DDC Dolakha to provide us the modality for the share allocations,” said Ganesh Raj Neupane, spokesperson of the project.
The delay in issuing the ordinary shares, however, will affect the project which will now have to rely on loans to fund the ongoing construction. “It will slightly increase our project costs,” said Neupane. The Upper Tamakoshi Hydropower Project has been identified as a strategic scheme as it is expected to end the country’s power woes. The power plant’s first unit is slated to start generating electricity by December this year while the remaining five units are expected to come online by April 2019.
Around 94 percent of the construction has been completed, but work has slowed to a crawl. Project officials blame the poor state of the road linking the project site in Dolakha for the sluggish progress. The condition of the 60-km road from Khadichaur to Charikot, Dolakha is very poor, and the project office is facing difficulties transporting heavy electromechanical equipment that need to be installed at the hydropower plant.
The Upper Tamakoshi project, located east of Kathmandu, is being built using domestic financial resources. The national pride project was originally scheduled to be completed in mid-July 2016, but the earthquakes, Indian trade blockade and various technical and social issues pushed back the completion date.