Company promoters say that the company will help solve the Rupee crunch, accelerate hydro projects and build national capacity in hydro construction
Bhutan’s first hydropower construction company to be called the Bhutan Energy and Infrastructure Limited (BEIL) will be registered with the Ministry of Economic Affairs (MoEA) within this month.
Speaking to The Bhutanese, the Member Secretary of the Interim Committee of the BEIL, Gopal Waiba said, “the company wanted to complete the registration process by the end of the February this year, but registering the core promoters under Construction Development Board (CDB) was problematic, which caused the delay in the registration process.”
The company also lost a few investors due to the slow registration process. “It was getting too long to get us registered, which was causing a financial burden on us,” said one contractor who chose to remain anonymous.
The Interim Committee of the BEIL is positive that MoEA will not take more than a week to register the company. Gopal Waiba said the objective behind establishing the company was to build the Bhutanese economy, and also to be a lucrative national revenue generator earning in Rupees.
The company plans to undertake all the hydropower construction work in hydropower sites in Bhutan. “The company would also do the feasibility study for 15-50 MW sites that have already been found,” said Gopal Waiba.
From 17 promoters that registered during the consortium meeting on 20th February 2012, today, there are around 30 investors in the company. The company will work with an initial investment of around Nu 30mn, where each promoter puts in a minimum contribution of Nu 0.5mn.
The initial investment will be spent on the first phase of the company, which includes setting up the company, conducting the feasibility studies, construction of roads and bridges and other relevant survey required by the company. The second phase will include purchasing equipment and the construction of hydropower plants, which will require an additional investment of Nu 2bn to Nu 4bn.
To raise the capital sum required, the company will float shares of minimum 30% to 49% to the public. “The main motive is to encourage savings and investment culture in the Bhutanese society,” said Gopal Waiba. “Though it is a long term investment, the company is planning to give dividends to shareholders by the 5th or 7th year of installment,” he said.
The promoters are optimistic about the venture, and termed it as a “milking cow” for the potential it holds in generating revenue, and in creating employment opportunities. The company expects to recover the cost of investment within 12 to 14 years of installment. “We can see a prosperous future in this venture since the nation has many potential sites for hydropower energy,” said Leki Dorji Norbu from Bhutan Engineering.
The government will allow hydropower energy venture to be exempt from tax, and permit it to recover the cost of investment within a minimum period of 30 years, and with an extension period of 15 years. The President, of the Construction Association Board (CAB) and one of the main promoters of BEIL, Ugen Tshechup said that they are looking forward for such an opportunity given by the government.
The company stated it has a huge potential to earn Rupees, and the government should extend full cooperation in the venture. The Secretary of CAB , Cheku Drukpa said, “the Rupee crunch has not affected the formation of the company.” Although there will be some problems in securing investment at the initial period, the company is determined to start even if they have to borrow in foreign currency from reserves in other nations. Once in operation, BEIL believes that they can accelerate the hydropower projects and also help curb the Rupee crunch.
The company will also focus on enhancing the national engineering capacity, professionalism, cost efficiency, and quality in the hydropower industry. “We would like to take part in any of the small hydropower projects and gain experience and knowledge,” said Ugen Tshechup.
BEIL is looking to set up their head office in the capital. Consultancy firms like, Afcon and Aquagreen among others are working with the company for now. The company logo is also being finalized, and the recruitment of Bhutanese workers will start once the company registration goes through.