Kathmandu. The devastating flood in the Bhotekoshi River in Rasuwa on August 26 has caused damage to the 111 MW Rasuwagadhi Hydropower Project, bringing power generation to a standstill. The suspension of production has affected the project’s income and may also put pressure on the company’s cash flow and credit servicing capacity.
According to the information given by Rasuwagadhi Hydropower Company Limited to Nepal Stock Exchange (NEPSE), the company has long-term and short-term loan of around Rs 17.70 billion from various banks and financial institutions.
According to the company, if the time taken for the resumption of the project is prolonged, there may be pressure on the management of loan interest and installment payment due to lack of regular income.
According to the company, the power generation has been halted due to natural disaster and it will take time to restore the project, which could affect the company’s cash flow and loan service capacity.
It is said that the actual financial impact and status of debt service management will be ascertained only after a detailed financial evaluation. The company has started the insurance claim process for the physical damage caused by the flood. The company has said that the claim process has been started after formally informing the insurance company of the physical infrastructure, machinery and employees related to the project.
The floods have damaged the outer structures of the dam site, the power house, the site office, the staff quarters, vehicles, heavy equipment, concrete bridges and access roads. The underground powerhouse has been filled with mud and electromechanical equipment and three towers of the transmission line have been completely damaged.
Four concrete bridges and access road along the 16-km road section from Syafrubesi leading to the project site have also been destroyed. The company has said that it will be difficult to carry out the rehabilitation work at the project site until the road and access road are reconstructed. The time taken for the resumption of the project will be determined only after the technical evaluation.
Will insurance cover the cost of reconstruction?
The cost of reconstruction has not been determined as the actual damage caused by the floods has not been assessed. The rehabilitation cost is likely to be high due to the damage to the underground powerhouse, electromechanical equipment, transmission lines, bridges and access roads.
The difference between the amount of insurance claim and the actual cost of reconstruction will determine the additional financial resources that the company will need. Therefore, the settlement of insurance claims, the cost of reconstruction and the time of return to operation of the project have become major financial issues for the company.
Meanwhile, 92 people working at the project are still missing in the floods, according to the company. Skilled mountaineers, engineers and tunnel experts from the Nepal Army, Nepal Police, Armed Police Force, Mountaineering Association have been mobilized for the search and rescue. The body of one of the employees was identified during the search, the company said.
