High-interest rates and reduced power generation hit hydropower companies’ profit

The Annapurna Express

The Annapurna Express

High-interest rates and reduced power generation hit hydropower companies’ profit

While the prospect of electricity exports has lured many people to invest in hydropower projects and shares of power companies in recent years, the third-quarter financial reports of hydropower companies show power producers are facing the heat of higher interest rates and a decline in power generation.

Of the five dozen hydropower companies that have published their financial reports, two dozen have reported losses in the third quarter of the current fiscal year 2022/23.

As of Wednesday, 64 hydropower companies have published their financial statements. Of them, 25 have reported losses, 28 reported decline in profits, and only 11 reported growth in profits in the review period.

The financial statements show 38 hydropower companies have reported earning profit in the current fiscal year. Among the companies, Chilime Hydropower Company stood at the top with a profit of Rs 528.9m. Chilime Hydropower, a subsidiary of Nepal Electricity Authority saw its profit increase by only 1.33 percent in this fiscal. While the Sanima Mai Hydropower Company recorded a profit of Rs 358.2m, its profit has decreased by 20.4 percent.

Universal Power Company Limited recorded the highest growth in profit with a growth of 409.47 percent. The company posted a profit of Rs 68.06m in the third quarter of the current fiscal year, up from Rs 13.35m in the last fiscal year.

In the review period, the state-owned Upper Tamakoshi Hydropower Company incurred the biggest loss. The company which is operating the 456 MW Upper Tamakoshi Hydroelectric Project has recorded a loss of Rs 2.33bn compared to a loss of Rs 1.65bn in the corresponding period of the last fiscal year.

The private sector-run Shiv Shree Hydropower is the second largest loss-making hydropower company with a loss of Rs 237.93m. The company’s loss in this fiscal is lower than that of the last fiscal.

Balefi Hydropower Company is third on the list with a loss of Rs 237.2m compared to Rs 0.6m in the third quarter of the last fiscal year.

Independent power developers said that hydropower companies are either in losses or their profit has declined mainly due to two reasons—banks’ higher interest rates and a decline in their income due to low power generation.

According to them, the surge in the borrowing rates has hit the companies hard. As the majority of power producers had to pay higher interest rates for the loans in the current fiscal year, their profitability has been affected. “Hydropower companies that were paying 8-10 percent interest earlier, were forced to pay up to 14-15 percent interest,” said Krishna Prasad Acharya, president of the Independent Power Producers’ Association Nepal (IPPAN).

In addition to this, the electricity generation of major hydroelectric projects has also decreased more this winter compared to the last winter due to the prolonged dry season and a decrease in water levels in the rivers.

The majority of hydropower plants in Nepal are run-of-the-river type hydropower projects that usually produce less than 40 percent of their installed capacity as water levels in the rivers decrease significantly during the dry season. “The profits have been affected due to the decline in power generation,” said Acharya.

Companies whose profit has increased

Company Profit (in Rs, in m) Change (in percent)
Chilime Hydropower 528.98 1.33
Butwal Power Company 268.19 12.88
Radhi Bidyut Company 86.4 83.41
Himalayan Hydropower 85.71 233.37
Universal Power Company 68.06 409.47
Sagarmatha Jalbidyut Company 45.46 26.19
Nepal Hydro Developers 35.58 24.04
Shuvam Power Limited 5.06 170.03
Dordi Khola Hydropower Company 15.38 8.23
Rapti Hydro 1.27 0.17
Ngadi Group Power Limited 49.94 192.66


Companies whose profit has decreased

Company Profit (in Rs, in m) Change (in percent)
Sanima Mai Hydropower 358.23 -20.4
Sahas Urja Limited 265.13 -54.39
Mountain Energy Nepal 263.43 -38.3
Arun Kabeli Power 143.57 -35.99
Panchthar Power Company 86.06 -38.13
Mountain Hydro Nepal 78.55 -31.56
Ruru Jalbidhyut 66.8 -17.4
Arun Valley Hydropower 64.46 -35.51
Bindhyabasini Hydropower 64.15 -47.57
Kalika Power Company 60.51 -11.57
Sikles Hydropower 59.65 -5
Api Power 50.3 -71.07
Ngadi Group Power 49.94 -8.316
Super Mai Hydropower 48.35 -41.19
United Idi-Mardi and RB Hydropower 24.5 -53.56
Upper Hewakhola Hydropower 23.06 -50.25
Synergy Power Development Limited 22.83 -40.9
Union Hydropower 17.25 -32.5
Barun Hydropower 14.21 -40.2
Mandakini Hydropower 13.97 -59.53
Pancha Kanya Mai Hydropower 11.51 -74.69
Upper Solu Hydro Electric Company 10.81 -78.98
United Modi Hydropower 10.33 -62.34
Mailung Khola Jal Vidhyut Company 9.31 -20.75
Ankhukhola Hydropower Company 8.65 -71.58
Sayapatri Hydropower Limited 7.74 -65.98
Ridi Power Limited 4.48 -99.07
Khani Khola Hydropower Company 4.11 -80.44



Companies in losses 

Company Loss (in Rs, in m)
Rasuwagadhi Hydropower Company 0.04
Chhyangdi Hydropower Company 3.6
River Falls Power Limited 8.76
Samling Power Company 8.59
Barahi Hydropower 9.64
Super Madi Hydropower 10.76
Maya Khola Hydropower Company 13.27
Ghalemdi Hydro Limited 15.52
Sanjen Jalavidhyut Company 17.73
National Hydro Power Company Limited 22.9
Dibyashwari Hydropower Company 23.4
Asian Hydropower Limited 25.04
Molung Hydropower Company 26.5
Terhathum Power Company 27.8
Himalaya Urja Bikas Company 45.09
Madhya Bhotekoshi Jalavidyut Company 48.39
Swet-Ganga Hydropower 59.7
Sanima Middle Tamor Hydropower 59.72
Liberty Energy Company 79.98
Singati Hydro Energy Limited 93.01
Himalayan Power Partner Limited 104.3
Nyadi Hydropower Limited 158.97
Balephi Hydropower Limited 237.21
Shiva Shree Hydropower 237.93
Upper Tamakoshi Hydropower 2023.41


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