Thulo Khola Hydropower Initiates 22.5 MW Production, Unveils Ambitious IPO and Future Project Roadmap

Thulo Khola Hydropower Limited (TKHL) has successfully commenced commercial operation of its 22.5-megawatt Upper Thulo Khola 'A' Hydropower Project, marking a significant milestone in Nepal's energy sector. Situated in the remote, rugged terrain of Myagdi district, this project not only adds crucial capacity to the national grid but also sets the stage for the company's ambitious growth trajectory, including an upcoming Initial Public Offering (IPO) and plans for further project development.

The journey of Thulo Khola Hydropower Limited began on Baisakh 10, 2074 BS (April 23, 2017), as a private entity. Recognizing the importance of broader public participation and aiming for enhanced transparency, the company transitioned to a public limited company on Magh 23, 2079 BS (February 6, 2023). This strategic move was more than a legal formality; it underscored TKHL's commitment to becoming a robust and transparent player in Nepal's burgeoning energy landscape.

The Upper Thulo Khola 'A' project, initially conceived as a 15 MW facility, saw its capacity upgraded to 22.5 MW in the fiscal year 2078/79 BS (2021/22). This expansion reflected the company's growing confidence and technical capabilities. The project's headworks are located at a challenging altitude of 3,000 meters above sea level, with the powerhouse situated between 2,400 and 2,500 meters. Operating in such high-altitude, difficult terrain presented formidable engineering and logistical challenges, likened by the company to "chewing iron chickpeas."

Construction officially commenced in Baisakh 2080 BS (April 2023), but the mountainous environment proved to be a significant hurdle. Geographical remoteness, unstable soil conditions, persistent landslide risks, and extreme weather patterns, including heavy rainfall and snow, repeatedly disrupted construction activities. These natural adversities necessitated a change in the substation route, leading to an increase in the project's initial cost estimates. Originally projected at NPR 4.46 billion, the total project cost escalated to NPR 5.145 billion.

Nabin Silwal, Chief Operating Officer of Thulo Khola Hydropower, elaborated on these challenges: "Initially, we estimated the cost at NPR 4.46 billion, but it has now risen to NPR 5.145 billion. The primary reason for this increase is the challenging geography. Both the powerhouse and intake areas faced significant landslide risks. The soil was loose, and heavy rain and snow made work extremely difficult. We had to construct numerous safety structures, which added to the cost. Furthermore, the transmission line route had to be altered, contributing to the budget overrun."

Despite these challenges, the company's financial foundation remained robust. A consortium of banks, led by Citizens Bank International Limited and including Sunrise Bank Limited, Machhapuchhre Bank Limited, and Agricultural Development Bank Limited, provided a substantial loan facility of NPR 3.695 billion, ensuring the project's successful completion.

As of the end of Falgun 2081 BS (mid-March 2024), the company had completed all major civil and hydro-mechanical works. While the initial target for commercial electricity production faced some delays due to unforeseen circumstances, primarily the late supply of electro-mechanical equipment and interruptions caused by national elections, TKHL is now targeting to commence full commercial operation by the end of Ashar 2081 BS (mid-July 2024). The project has also developed its own 6-kilometer transmission line to facilitate power evacuation to the Rahughat Substation.

Under the astute leadership of Chairman Narendra Ballav Pant, supported by an experienced board of directors including Shweta Adhikari, Dhiraj Karki, Baburaja Chakradhar, and Rajesh Kaji Shrestha, Thulo Khola Hydropower is poised for future expansion. The company's total paid-up capital stands at NPR 2.75 billion, with promoters contributing NPR 1.925 billion. The remaining NPR 825 million is slated to be raised from the general public through an IPO, which the company aims to launch within the next 7-8 months.

Looking ahead, Thulo Khola Hydropower is not content with merely completing one project. Its future roadmap is even more ambitious. The company plans to leverage the invaluable experience gained from the Upper Thulo Khola 'A' project to develop another significant venture: the 36.6 MW Dhorpatan Run-of-River Hydropower Project. This strategy of investment diversification is expected to establish TKHL as a major multi-project operator in Nepal's energy sector.

In conclusion, Thulo Khola Hydropower Limited is not just generating electricity; it is actively contributing to the economic prosperity of remote regions like Myagdi. With its successful project completion, robust financial backing, experienced leadership, and clear vision for future expansion, including a forthcoming IPO, the company presents a compelling opportunity for investors and stands as a vital contributor to Nepal's energy independence and development goals.