Kathmandu. Milke Jalaj, which is also promoted by Asian Life Insurance, has received a rating of ‘CARE-NP BB’ from rating agency CARE Ratings Nepal Limited (CRNL) for its long-term loan facility to Hydropower Limited (MJHL).
The rating is based on the construction period and post-operational risks of the 4.99 MW Upper Piluwa Hills Micro Hydropower Project (UPSHP) being commissioned by the company. It also covers the risks of natural disasters, instability of run-of-river hydropower projects.
According to Care Ratings, the company’s experienced and strong founders and experienced management team, low risk of selling electricity, long-term power purchase agreement (PPA) with Nepal Electricity Authority (Nepal), and government incentives for the hydropower sector have balanced this rating. The company’s board of directors is chaired by hydropower entrepreneur Man Bahadur Limbu. The board of directors also includes Asian Life Insurance CEO Dinesh Lal Shrestha and other promoters.
The construction of the project, which is scheduled to start commercial operations by Magh 4, 2026, is currently in the early stages. If it is delayed, the company risks having to pay penalties and not being able to benefit from tariff increases. Natural disasters such as snowfall, floods, landslides can affect the structure and operation of the project. The project depends on the water flow of the Piluwa River, which can lead to high production during the rainy season and low production during the dry season.
The company’s board of directors and management team include experts in the fields of hydropower, finance and insurance. According to the 30-year power purchase agreement with the Electricity Authority, electricity will be sold at Rs 8.40 per unit during the dry season and Rs 4.80 per unit during the rainy season. The government has given full tax exemption for 10 years and half tax exemption for 5 years, giving priority to the hydropower sector.
If the project is completed within the stipulated cost and time, its rating may improve. However, delays or cost overruns in construction could negatively impact the company’s financial position.
Milke Jalajle Hydropower Limited is constructing a 4.99 MW run-of-the-river hydropower project in Sankhuwasabha district. The project will be operated on a BOOT (Build, Own, Operate and Transfer) model.
