Govt okays capital increase for GMR subsidiaries

The government on Tuesday took more than half a dozen decisions related to hydropower, including allowing GMR Upper Karnali Hydropower Company Limited and Himtal Hydropower Comapny -- subsidiaries of Indian power developer GMR-- to increase their capital and set up offices in New Delhi, India.
Nepal Investment Board (NIB), a high-level government entity chaired by Prime Minister Dr Baburam Bhattarai, met Tuesday morning and decided to renew the survey license for GMR for its Upper Karnali project (900 MW) for another six months.
The government had first granted a survey license to GMR for the Upper Karnali in May 2008. "GMR had sought a one-year extension of the survey license," a high-level government official said. "But the existing law bars that."
Likewise, the meeting has allowed GMR Upper Karnali Hydropower Limited and Himtal Hydropower Limited to established in Nepal to develop the Upper Karnali and Upper Marsyangdi (600 MW) respectively and increase their authorized and issue capital from Rs 450 million to Rs 1.9 billion for each company.
The companies had sought government approval to increase their capital investment after they increased their project capacity.
According to information compiled at the Department of Energy Development (DoED), the capacity of Upper Karnali has increased from 300 to 900 MW and that of Upper Marsyangdi from 250 MW to 600 MW.
"The meeting decided to allow them to increase their capital to cover the increased capacity of the projects," the official told Republica.
IBN, at its meeting scheduled after a long time, has decided to allow Sutlej Jal Vidyut, a state owned Indian power producer, to bring in new equity shareholders and extend the time for doing so. Sutlej, which is developing the Arun III (900 MW) hydropower project, has been seeking new equity shareholders to develop the project.
According to the government official, Sutlej and GMR had both sought approval to establish offices in Delhi to work on marketing their hydropower once they come on stream. Both companies, which are engaged in the generation of a total of 2400 MW in Nepal, have targeted the Indian market for their future power output.
Additionally, the government has granted Himtal Hydropower Limited permission to start land acquisition verification (LAV) at the project site for Upper Marsyangdi in Lamjung and Manang districts.
"The company had requested permission to conduct LAV at the project site and this was granted," the official said.
Meanwhile, the government recently approved the environment impact assessment (EIA) report for the Upper Marsyangdi project prepared by GMR.
The government has awarded three mega hydropower projects -- Upper Karnali and Upper Marsyangdi to GMR and Arun III to Sutlej -- under the build-own-operate-transfer (BOOT) scheme.