Sanima Mai Hydropower Limited : Increase in project cost in Phase II

Sanima Mai Hydropower Limited issued its shares to public a little while back. As mandated by Securities Board of Nepal (SEBON), it had the public offering assessed by ICRA Nepal.

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The company had issued the offering to finance its two run-of-river hydropower projects with 22MW capacity project being built in Phase I and 7 MW capacity project being built in Phase II. The Phase II project will not require any Headworks as it is being built on cascade model, i.e. the water from tailrace of Phase I will be tapped to source the Phase II project. Cascade model have its inherent advantages in reducing environment impact as well as reducing capital investment required for the downstream project.

As per the rating by ICRA Nepal, the total project cost is estimated at NPR 4375.80 million. This converts to capital investment of NPR 150.89 million per MW. The rating further states that the project cost in Phase I (22 MW) is NPR 3119.53 million, i.e. 141.79 million per MW. The project cost for Phase II (7 MW) can be deduced from the above at NPR 1256.27 million. The per MW cost for Phase II comes out to be NPR 179.47 million, which is NPR 37.68 million additional cost per MW against the Phase I cost. The cost increment is of 26.57%. This is quite interesting, given the fact that cascade projects bring in cost advantages. The reverse is seen in the above case.