Green Ventures Limited to obtain bank facilities worth Rs.7.77 Arba; Care Ratings grades the issue

CARE Ratings Nepal Limited (CRNL) has assigned Rating of ‘CARE-NP BB’ to the long term bank facilities worth Rs.7620 Million and ‘CARE-NP A4’ to the short term bank facilities worth Rs.150 Million of Green Ventures Limited (GVL).

The ratings assigned to the bank facilities of Green Ventures Limited (GVL) is constrained by project implementation and stabilization risk, and power evacuation risk related to the transmission of generated power. The rating is also constrained by relatively high estimated cost of project, exposure to volatile interest rates and hydrology risk associated with run of the river power generation.

The ratings, however, derives strength from industrial experience of directors and promoters, presence of power purchase agreement (PPA) with sufficient period coverage and moderate counter party risk. The rating also factors in achievement of financial closure for estimated project cost, receipt of all major approvals for construction of the project, shortage of power in the country and government support for the power sector.

The ability of the company to timely execute the project within the Required Commercial Operation Date (RCOD) without any time or cost overrun and availability of sufficient hydrology and timely receipt of the payments from NEA are the key rating sensitivities.

Green Ventures Ltd (GVL) is a Public company, incorporated on December 7, 2004 as private limited company, later on February 25, 2019 converted to public limited company. The company is developing 52.4 MW run of-river, Likhu-4 Hydropower Project (L4HP) in Okhaldhunga and Ramechhap district of Nepal, for sale of entire power within Nepal. The power project is proposed to utilize available head and flow from Likhu Khola (river). The project is constructed under BOOT (Build, own, Operate and Transfer) mechanism.

It is promoted by one institutional promoter and other individual promoters. As on April 30, 2019, GVL has 20 promoters’ shareholders, contributed Rs.1915 Million equity share capital. Triveni Energy Pvt. Ltd. (10.72%), Mr. Govinda Lal Sanghai (10.61%), Mr. Birendra Kumar Sanghai (10.60%), Mr. Aditya Sanghai (7.97%) and Mr. Suvash Chandra Sanghai (6.68%) are the major promoter shareholder of the company.

Source: Care Ratings Nepal