Fiscal Year 2010/11 was marked and celebrated as historical centennial year of generation and commercial use of hydroelectricity in Nepal. Pharping-the first Hydroelectric Power Plant, started generating electricity in 1911. Despite a long history of electricity generation and consumption, Nepal has not been truly able to harness its potentials of more than 80,000 MWs.
As per popular estimates, the annual peak power demand of the country is estimated to be around 1100 MW, growing roughly at around 10% per Annum. However, with an installed capacity close to only 730 MW, there is a power deficit in the country, which has resulted in daily load shedding or planned scheduled power cuts of several hours in a day for the last couple of years.
Besides, an unmet domestic electricity demand, in the entire energy usage scenario of the country, electricity constitutes a very small fraction – only 2% and the rest is dominated by fuel wood, agricultural waste, animal dung and imported fossil fuel. There exists significant domestic opportunities to replace these alternate fuels by electricity and thus creates demand for electricity.
Addressing the unmet power demand, which has resulted in a national power crisis, and harnessing the significant opportunities associated with the development of hydropower required retrospective evaluation of national policies and actions. On 6th of July, 2011 things changed.
Realizing that i) the status quo was not doing good for the country, ii) there was an urgent need to address the energy crisis, and iii) the state required a special wing with huge financial might, professional expertise, single point agenda that could implement the hydropower development programs of the government, Government of Nepal on 6 July 2011 decided to set up a special purpose vehicle (SPV) in the form of Jalvidhyut Lagani Tatha Bikas Company Limited or Hydroelectricity Investment and Development Company Limited (HIDCL) in English.
HIDCL started its operations from 11 July 2011 at the Kathmandu District Development Committee premises at Babbarmahal in Kathmandu and continues to operate from the same facility.
Established as a public investment company, 80% equity belongs to Government of Nepal (50%) and three state owned companies (30%). 20% has been set aside for general public to be called though Initial Public Offering (IPO). Rs.10 Billion of equity has already been called as the issued capital. The Initial Public Offering of the company is yet to happen.