It has been found that the Power Generation Company (VUCL) did not inform the Board of Investment and the Electricity Regulatory Commission when requesting the letter of intent for the financial investment of the 1902 MW Mugu Karnali and 454 MW Kimathanka Arun hydropower projects. Hydropower projects of more than 200 MW come under the jurisdiction of the board.

Section 4 (d) of the Public-Private Partnership and Investment Act, 2075 states that the board will look into projects other than energy projects with an estimated cost of more than 6 billion rupees or hydropower projects with a capacity of more than 200 megawatts. However, VUCL has called for proposals for financial investment in Mugu Karnali and Kimathanka Arun hydropower projects by violating the jurisdiction. 

VUCL called for a proposal to 'investment sharing by investing at least 51 percent of the project's own capital in order to increase the indigenous capacity and encourage local investors. 

Board CEO Sushil Gyawali said that Mugu Karnali and Kimathanka Arun hydropower projects are under the board's jurisdiction according to law. "No one discussed with the board while proceeding with the process of those two projects," he said, "Even if there is no coordination now, the investment must come to the board for approval when the investment is brought in." 

CEO Gyawali said that the cabinet has not decided on the issue of Kimathanka Arun and Mugu Karnali on hydropower projects of more than 200 megawatts and entrusting them to the power development department, power generation company and Nepal Electricity Authority. VUCL has made an 'Investment Facilitation Procedure' and has requested a letter of intent for at least 51 percent investment in Mugu Karnali and Kimathanka Arun hydropower projects. 

Mugu Karnali and Kimathanka Arun hydropower project permit is in the name of VUCL and if the share structure needs to be changed, the energy authorities argue that prior approval should be obtained from the Electricity Regulatory Commission. "It is said that 51 percent of the shares have been requested for financial investment for the project, since the license is in the name of the company, the shares have been requested for the company itself," said an official of the Ministry of Energy. 

In Rule 45 of the Electricity Regulation Commission Regulations, 2075, 'a company or organization licensed to produce, transmit, distribute or trade in electricity must obtain prior approval from the Commission to publicly issue shares or to buy and sell shares with a change in share structure of more than 5 percent'. is mentioned.

But Ram Prasad Dhital, chairman of the Electricity Regulatory Commission, said that VUCL did not have any information or approval about Kimathanka Arun and Mugu Karnali. "We have only read about Kimathanka Arun and Mugu Karnali in the newspaper, nothing has come to us from VUCL, we will talk when they come," he said.

A complaint has been filed in the Infrastructure Development Committee of the House of Representatives saying that they are trying to give money to certain people in the collaboration of Mugu Karnali and Kimathanka Arun hydropower projects, which are considered commercially attractive. Lalindra Rai, a 'conscientious citizen', filed a complaint on January 12 as a 'representative of the sovereign people'. He also demanded that the entire process of notification regarding the submission of the letter of intent for the financial investment call be suspended until the complaint is resolved. 

Deepak Bahadur Singh, chairman of the Infrastructure Development Committee, said that Rai's complaint is under discussion. A complaint has been received only a few days ago, after registering it, the committee secretariat has proceeded with the process. We will call VUCL officials, energy minister and energy secretary to discuss this matter," he said. "I will also call experts and understand. After understanding the rules and laws, I will put them in the committee. We will also call the relevant minister and discuss, then take the necessary decision.' 

VUCL had sent to the Ministry of Energy on December 7, asking for a policy agreement on the investment partnership process. On the same day, Energy Minister Deepak Khadka gave policy consent based on the 'Energy Development Roadmap and Action Plan, 2081'. While the action plan was not approved by the Council of Ministers at that time. A month later, the Cabinet meeting held on December 16 only approved the action plan.

On November 9, the VUCL Board of Directors meeting presided over by Suresh Acharya, Secretary of the Ministry of Energy, formed a three-member sub-committee chaired by Vinod Kumar Bhattarai, the director of the company, to draft the 'procedure for sharing investment for project construction'. VUCL Chief Executive Officer (CEO) Bakhat Bahadur Shahi and Hydroelectricity Investment and Development Company (HIDCL) Chief Administrative Officer Arjan Kumar Gautam were members of the sub-committee.

The sub-committee, which had a week's time, prepared a draft of the procedure before the deadline. It was approved by the board meeting on November 14. On the ninth day after the procedure was approved, i.e. on November 23, a 15-day notice was issued to submit proposals for financial investment in two large hydropower projects. As the information was released in a hurry, the details of the project were made public only on November 28.

The estimated cost of the Kimathanka Arun hydropower project, located in North Bhotkhola Rural Municipality-2 of Sankhuwasabha, is 93 billion 800 million. Similarly, the estimated cost of the Mugu Karnali project, which will affect the Mugu, Humla, Bajura, Kalikot and Jumla areas, is 4 trillion 60 billion. The basis of the amount that the investors have to pay to the government to take up such large projects is kept like money.

It was asked to add a total of 5 percent 'overhead' to the expenditure incurred by the government for the construction of infrastructure at the project site and submit a proposal considering that amount as the minimum. Based on the expenses incurred so far, five percent 'overhead' and inflation, a minimum price of Rs 908.1 million for Kimathanka Arun and Rs 487.2 million for Mugu Karnali has been fixed. The offer of investment partnership for Mugu Karnali has come only from Congress MP Vinod Chaudhary's company CG Energo Private Limited.

CG Energo Private Limited will get Mugu Karnali no matter how much the process has progressed since the procedure has a provision that even if only one proposal is submitted, it can be evaluated. After taking over the project, the company can sell it to any foreign company at its own terms and price. In the procedure, it is mentioned that the proponent can hold at least 26 percent of the shares and bring in the rest of the shares with other investors or partners, provided that the financial management and construction of the project is ensured.