Hydropower Projects In Nepal: Finance and Risk Mitigation

Bc. Karpur Shrestha, BSBA

Master's thesis

Abstract:

The objective of this study is to explore the investment scenarios in the hydropower sector and recognize the viability of hydropower project financing in Nepal. It is conducted with the aim of understanding the ongoing development of Hydropower projects in Nepal and to find out the proper way to evaluate the planned & proposed hydropower projects. The study is also undertaken to analyze the problems of financial institutions, hydropower developers and government agencies in hydropower projects funding in the context of Nepal. This research was conducted as a case study comparing two hydropower projects, namely, Chilime Hydropower Company and National Hydropower Company along with a critical anlysis of the investment scenario and Government Policies & Acts influencing this sector. The hydropower companies chosen for this study, have different Capital Structure and Funding, yet both projects are economically feasible. Capital Budgeting tools used in this study have concluded that due to immense potential and favourable government policies such as tax exemption, hydropower projects, small or big in size, have positive financial outcomes. The major risk factor to any of the hydropower projects comes from political instability, state of basic infrastructure and monopoly buyer situation. The study further concludes that hydropower projects are capital-intensive with a longer payback period, so the best strategy for hydropower development is public-private partnership, filling the gap between economic and financial viability.

Keywords

Hydropower, Financing, Investment, Nepal, Risk, Government Policies, Capital Budgeting

Jazyk práce: English

Datum vytvoření / odevzdání či podání práce: 29. 3. 2018

Obhajoba závěrečné práce

• Vedúci: Ing. Petr Procházka, MSc Ph.D.

Czech University of Life Sciences Prague

Faculty of Economics and Management

Master programme / odbor:
Economics Policy and Administration / Business Administration