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| Nepal topography. The green/yellow zones hold the Inner Terai valleys. (Photo credit: Wikipedia) |
Feeling Intense About Nepal Hydro
By Paramendra Bhagat (www.paramendra.com)
I harbor pretty intense feelings about Nepal hydro and hopefully I have been infecting some of the people around me.
Nepalis grew up being fed the potential of Nepal hydro. But if the country’s capacity is to produce 50,000 MW (some estimates put the capacity at 200,000 MW) then less than 1% has been produced so far, less than 500 MW. Most of what has been produced has been at the initiative of the government of Nepal with funding from entities like the World Bank, the Asian Development Bank and the like. But some small projects have made headway recently through efforts by private individuals in Nepal. That is commendable. There is some serious Chinese and Indian interest in the sector as well. China is especially to be watched. Some Chinese companies look like might swoop in and grab some really big projects.
And then there is the NRN effort. The NRNA is a non profit. It can not be making for profit moves. But it has incorporated a for profit company. That company I believe is investing in one small project in Nepal. That effort is commendable. But I can’t think of one Nepali in NYC who could put a million of his or her money into a project in Nepal when hydro projects routinely ask for tens of millions of dollars. Appealing to the patriotism of the global Nepali population has huge limitations.
My effort is in the hard core for profit sector, the shark eat shark world of global finance. This is early innings. From 500 MW to 50,000 MW might be two decades worth of work. I am going to start out by being the guy who raises money, but down the line my company is going to provide A to Z solutions. My multi-national corporation is also going to do construction work for the dams in Nepal. Fundraising is not going to be enough fun for too long.
And why stop at Nepal? There are hydro prospects in India, in Pakistan, in Brazil. Clean Energy is not limited to hydro. There is wind, there is solar. There are several continents to explore. But one step at a time.
One guy said, but why have not Binod Chaudhary or Upendra Mahato invested in Nepal hydro? Good question. Nepal hydro is a tough nut to crack. Whoever cracks up the Nepal hydro code is going to be bigger than Binod Chaudhary or Upendra Mahato. There is your answer.
My hydro team is going to be the top Nepal hydro team in New York City. I am smart, I am hard working, I am a super networker, I can penetrate Indian circles easily for being half Indian, I speak a few languages, I am no hydro philanthropist or hobbyist, as in I am not some full time lawyer, engineer, doctor, life insurance agent, peddler, business hawker, or whatever trying to wing hydro on the side during nights and weekends. Hydro for me is a serious career move. It is going to be getting full time like attention from me. It is between that and my software interests. If you are not going full time with it, it will be hard for you to compete with me. You might as well bring your projects to me for your small cut. Or you could languish like about 200 Nepalis in New York City who are each carrying PDFs of hydro projects in their email accounts. Those project PDFs are not wine. They don’t get better with time.
Funding necessarily has to be a package deal. Investors in NYC are capable of fully funding, but that’s not the point. If you have local private investors in Nepal and local and regional banks involved that builds trust. Imagine a scenario where a 10 MW project has an ask for $15 million. $7 gets raised in Nepal and the region. $8 gets raised in NYC. Of that $8 million, $1 million gets raised among Nepalis in the city. I can easily think of 20 Nepalis who could put in 50K each if they were interested, several could put much more. I really like the idea of raising 1,000 dollars each from about 100 Nepalis in the city.
But when none of the money has been raised, I ask the Nepal team to find me 10 Nepalis they might know in NYC who would be willing to put 1K each for shares worth 2K in the project. This is not about the money. 10K is not going to move the project. This is about social capital. Those ten people are going to help keep the communication between me and my local team and the Nepal team as smooth as possible. It is also a vote of confidence in Nepal’s hydro potential. As for that million to be raised from among Nepalis, I have been advised that has to be the very final step in the fundraising. Nepalis are going to come in, but not at the beginning. That makes sense. Can’t blame the local Nepalis for wanting to be the icing on the cake. After all, they have some claim to the country.
Investing is for those who have money to spare. If you are making below minimum wage in the shadow economy, chances are hydro projects are not of investment interests to you. That is understandable. Or even if you are making six figures but you have been living beyond your means, chances are you will yawn at the prospect of hydro projects.
And then there is sheer inertia in segments of the community. I went to meet someone. After some small talk I brought up the topic. I’d like to talk to you about Nepal hydro for a few minutes, I said. The guy paused for a few split seconds and said, “Please finish the tea and leave.”
