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 |
