Api Power Company Ltd with its corporate office at Trade Tower Nepal, Thapathali was first established in 2060 under the Companies Act. Later, it became a stock market listed company in 2070. As a hydropower company, Api Power focuses on generating electricity by utilising the country’s water resources. The company has 151,000 general shareholders and 1,600 promoter shareholders with a paid-up capital of Rs 1 billion.

Naugarh Gad Project
The 8.5 MW Naugarh Gad Small Hydropower Project in Darchula is the first private sector project in the Far Western region developed by Api Power. Completed inside 17 months, it is also the fastest developed hydel project in Nepal and has been generating electricity since 2072. "Due to the project, there is no power cut problems in Darchula, Baitadi, Dadheldura, Doti, Achham and Bajhang districts," says Sanjeev Neupane, Managing Director of the company. 

Api Power spent a total of Rs 1.40 billion on the project. It has a 70:30 debt to equity ratio, with the 70 percent comprising of bank loans led by Nepal Bank Ltd and the other 30 percent as equity from shareholders. Even in the short since the completion of the project, it plans to distribute 10 percent dividend to its shareholders which is yet to be approved by the company’s board. 

Project Under Construction
The 8 MW Upper Naugarh Hydroelectric Project is another project of Api Power which is under construction. The project lying 5 kilometres upstream of Naugarh Gad Hydroelectric project’s intake is located at Dhuligada and Shikhar VDCs of Darchula. 

Project Under Study
Api Power Company has been studying the 40 MW Upper Chameliya Hydropower Project located at Lattinath, Guljar and Tapoban VDCs of Darchula. Neupane mentions that the company is in the process of receiving the project development license and will start construction in the near future. The company aims to complete the project within three and half years.

IPO 
Api Power Company became a stock market listed entity in 2015. It was necessary for the company to float shares to the general public in order to match the requirement of its 70:30 debt to equity ratio. "This helped us to increase our cash position. 
It was also important for us to garner public support," says Neupane.

HEP Problems and Challenges
Hydropower is considered to be among the most underdeveloped sectors in Nepal despite the huge potential the country possesses. Neupane cites various underlying reasons for this. According to him, even with completed projects, most of the hydropower companies cannot supply the electricity because of the lack of transmission lines. “It is proving quite difficult for many power producers to supply electricity via the national grid as due to the limited availability of transmission lines. The government needs to prioritise the building of transmission lines,” opines Neupane. “We need to develop cross-country transmission lines connecting Nepal, India, Bangladesh and China which will help us in our power trade endeavours in the future,” he adds.  

Similarly, he also says that fulfilling the various demands of the people residing around the project areas are among the major impediments to hydropower development. As per Neupane, acquisition of land is the major hurdle. “This is due to the lack of proper benchmarks and parameters for land acquisition,” he says. 

“The government lacks a clear and proper policy and implementation plan for hydropower businesses,” states Neupane. He suggests establishing a forum where the government, developers and stakeholders can meet in order to solve the problems. 

The unwillingness of the government to handover the most feasible projects to developers is also a deterrent to the private power developers. “We have to rigorously search for the feasible and doable projects- a difficult task for us," says Neupane. “Meanwhile, the hydropower market also has a large number people who just hold project licenses and do nothing for decades.” 

Suggestions for Investors
 According to him, many investors are carelessly investing in the hydropower sector at present. 

He suggests that investors should have proper information on the companies before investing. “They need to have proper knowledge about the developers, the strengths of the projects and the response the companies are getting from the market," suggests Neupane.

He says that Api Power Company as a rising power developer in Nepal. “We have garnered the trust of our investors in a very short run. This has enabled us to develop more projects which we are doing currently.  The investors investing in our projects need not worry about the security of their investments,” he says.  

Expectations from Govt
Hydropower is a highly risky business in Nepal. Entrepreneurs have to bear the pressure physically and financially. The government has to provide a proper working environment to the entrepreneurs so that it can secure hydropower developers. Similarly, it has to develop benchmarks of standard for hydropower projects. Neupane says, "The government can develop a land acquisition policy so that people do not undertake any unnecessary bargaining on the price of land. We need a one window policy that can solve every kind of problem from a single desk."

According to him, the government should modify the Power Purchase Agreement (PPA) rate in order to attract private investment into the hydropower sector. The existing PPA of Nepal is not as per international standards as it is the cheapest in South Asia. 

Business Diversification
Api Power Company aims to maximise the wealth of its shareholders. So, the company has diversified its business to various other profitable areas so that it can provide maximum return to its shareholders.  "We have our own projects and have been investing in other profitable projects. At the same time we are also focusing on alternative sources of power generation such as solar projects and bio-mass," informs Neupane. "We have also invested in the Arun Valley Hydropower project and the Arun Kabeli Hydropower Project and they have also invested in our projects so we have intercompany investment," he shares. Meanwhile, the company aims to become a leading power developer in the country. “Our objective is to make Api Power the largest private power developer in Nepal within five years,” adds Neupane.   

CSR Activities
 The company has given equal priority to CSR activities.  It has built eight temples in the village where the Naugrah Gad Project site is located. Similarly, the company has constructed two RRC school buildings in the village spending Rs 2 million while also broadening the road. "We have actively participated in the construction of drinking water supply, irrigation system and health posts in two VDCs of Darchula," says Neupane.

Future Plans
The Upper Naugarh Gad Project is the top priority for Api Power Company currently. It aims to complete the project in the next 17-18 months. After the completion of the project the company plans to start the construction of the Upper Chameliya Hydroelectric Project. Neupane says, "The equipment and the human resources of the Upper Naugarh Project will be shifted to construct the Upper Chameliya Project after the completion of the Upper Naugarh as the project sites are close to each other." 

Similarly, Api Power will be issuing right shares in the ratio 1:2 to raise the paid-up capital to Rs 2 billion. The capital will be invested in the 75 MW Trishuli-Galchhi Hydropower project which will be developed by Siddhakali Power Limited in which Api Power has an 80 percent stake. 

Human Resources
The company employs around 30 employees at its head office and project sites. Out of them, 15 are technical employees, mainly civil engineers, electrical engineers and so forth. "Our company seeks a limited but efficient and professional workforce so that even a single staff member could handle various responsibilities." says, Neupane. "Our emphasis is on selecting a limited but result oriented staff."