BPC: A Pioneer in Nepal's Hydropower Development

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 BPC: A Pioneer in Nepal's Hydropower Development

Established in 1966 as a private company and converted into a public limited company in 1993, Butwal Power Company (BPC) is one of the leading companies in Nepal’s power sector with generation and distribution as its core business areas. BPC has a track record of pioneering multi- faceted capacity building initiatives in hydropower development.

Pursuing the privatization process, in 2003, the government handed over majority ownership and management control to private investors on public-private partnership model. BPC is registered with the Securities Board of Nepal and listed in Nepal Stock Exchange Limited. Starting off with electrification plan of a small city in the south of central Nepal, BPC is the only enterprise which can look back to a five decade long history of success, sustained growth and capacity building in the country.

Through its subsidiary companies, BPC is engaged in operation and maintenance of power plants, consulting engineering of hydropower and infrastructure projects, and manufacturing and repair of hydro-mechanical and electro-mechanical equipment for power plants.

The government side (Nepal government, Nepal Electricity Authority (NEA) and NIDC Development Bank) holds 11 percent shares in the company. Similarly, Shangrila Energy, IKN Nepal AS and individuals hold 75 percent shares of the company. The general public and employees of the company hold 12 percent shares of the company.

BPC, which began with an investment of Rs 830 million, generated revenue of Rs 1 billion in the last fiscal year alone out of which Rs 600 million was the company's net profit. In this way, the company has been making profits every year. As a result, the company was able to distribute 20 percent cash dividend and seven percent bonus shares to the investors. It has distributed a cash dividend of 20 percent in the previous year.

The company plans to excel not only in building hydropower projects but also in the production of electric utilities. For this, BPC has a subsidiary company named Nepal Hydro and Electric Limited which works in the area of hydroelectric equipment maintenance and manufacturing. Located in Butwal, this subsidiary company has played an important role in manufacturing and maintenance of not only its mother company's equipment but also that of other private companies and NEA.

Hydro Consult Engineering is another subsidiary company of BPC that has shown its engineering and construction supervision competence in not only in Nepal but also in Kenya, Africa. BPC has also invested in the Hydro Lab located in the Institute of Engineering, Pulchowk. BPC Service Ltd is another subsidiary company of BPC that has 100 percent investment from BPC which is one of the pioneers in hydropower development in Nepal.

BPC has played a role in the completion of four hydropower projects so far. Among these projects, BPC has sold the electricity produced from Adhikhola and Jhimruk projects to NEA. It has also distributed the electricity produced from these projects to Palpa, Syangja, Arghakhachi and Pyuthan districts through its own distribution network. Similarly, BPC owns majority shares in Khudi Hydropower Project and 17 percent of shares in the 60 MW Khimti Hydropower Project.

BPC which has been developing run-of-river (RoR) projects so far is now also engaged in Peaking RoR projects. The company has 56 percent shares in the37.6 MW Kabeli-A Hydroelectric Project which is being built in Taplejung. The company also has shares in the 30 MW Nyadi Hydropower Project being developed in Lamjung. According to the company, both these projects will start commercial production from April 2020. "We will be adding 67.6 MW of electricity to the national grid over the next three years," said Padma Jyoti, chairman of BPC's Board of Directors.

While Infraco Asia, Singapore is BPC's partner in Kabeli A, Lamjung Electricity Development Company is BPC's partner in the Nyadi Hydropower Project.    

The company plans to keep developing hydropower projects in the future as well. As per this plan, BPC is making preparations for the 100 MW Lower Manang-Marsyangdi Project. To supply electricity needed for the construction of this project, BPC is to build the 8.5 MW Chino Khola Hydropower Project.

"We are looking for appropriate locations for reservoir-based hydroelectricity projects," BPC's chief executive officer Uttar Kumar Shrestha said, "We are ready if we get an already identified reservoir-based project." 

The company has been able to receive investments from institutions like the World Bank and International Finance Corporation (IFC). Nepali Banks like Everest Bank, Global IME Bank, Nabil Bank, Himalayan Bank, Nepal Investment Bank, Sunrise Bank, NIC Asia Bank and Mega Bank have invested in the projects being developed by BPC and its subsidiary companies.

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