December 21: The ownership transfer of fifty percent shares of Khimti Hydropower Project to the government has been delayed due to lack of consensus between the NEA and the promoter company. As per the agreement reached between the government and the promoter company, Himal Power, fifty percent shares of the project should be owned by Nepal Electricity Authority from July 11, 2020. However, the transfer has not taken place.

The officials of the Ministry of Energy, Water Resources and Irrigation and NEA said that discussions are still underway for the transfer of share ownership. They have been in discussions with the promoter company for the last two years. However, no concrete decision has been made. 

Spokesperson of the Ministry and Joint Secretary Madhu Prasad Bhetuwal said that discussions are underway to transfer ownership of the Khimti project. Both the parties are yet to reach agreement on some issues. "Following the share transfer, the same company is required to take responsibility for the operation of the project which the company has objected to," he said. 

Meanwhile, Kulman Ghising, managing director of NEA, said that the process of share transfer has been delayed due to Himal Power Company. “We are negotiating on issues like PPA, but the delay is due to their side," he said.

The COVID-19 pandemic has also delayed the transfer of ownership. Himal Power Company includes foreign investors, and the COVID-19 restrictions prevented physical meetings for a long time.

Hydropower projects built by the private sector should be handed over to the government after a certain period of time. This is the first project being handed over to the government by the private sector so it is being looked upon with high priority.

Bhetuwal also claimed the government is working on this issue giving due importance.  "This is the first hydropower project being handed over to the government. So a wrong precedence should not be established,” he added. 
In order to complete the process of share transfer, it is necessary to establish a joint venture company owned by both the authority and the promoter company. Then the company will sign a power purchase agreement (PPA) with NEA. However, such joint company has yet to be established. Also, the two sides have not reached an agreement on PPA. However, both sides have agreed that the current PPA rate will be decided in terms of Nepali currency. The law forbids PPA of projects below 100 MW capacity in foreign currency. 

This is the first privately funded hydropower project with investment from companies including Butwal Power Company Limited of Nepal, Statkraft SF of Norway and Alstom Power S. 
An agreement was signed between the then government and the company to transfer 50 percent shares of the project to NEA after twenty years of production. After fifty years of operation of the project, NEA will have full ownership of the project.

Currently, the project is being operated by signing an interim agreement between Himal Power and NEA. 
The interim agreement between NEA and Himal Power Company has been extended till mid-July 2022 as the transfer of ownership could not be completed on time.  Ghising believes the transfer of ownership will be completed by mid-July.