They said any transaction of shares before that would be against Project Development Agreement (PDA) that GMR signed with IBN in 2014. Breach of any clause in PDA might lead to termination of PDA, according to officials.
“The company can sell its stakes thereafter to any qualified investors having credit rating higher than that of GMR at the time of signing PDA,” added Rijal.
GMR owns 63 percent stake in the company after giving 27 percent free equity to the Government of Nepal. Similarly, IFC has signed initial agreement to own 10 percent stake in the company after financial closure is achieved.
GMR can sell shares after the expiry of lock-in period but it should be the largest shareholder for the remaining period (of 25 years), Radhesh Panta, CEO of IBN, said.
However, the Joint Development Agreement signed between IFC and GMR says that IFC prefers finding internationally acclaimed strategic partner having experience in hydropower development.
GMR signed PDA to develop the 900-megawatt project on September 19, 2014 under build operate own and transfer modality.
In an email response to Republica, Raghuveer Sharma, Chief Investment Officer of IFC, denied transfer of shares of GMR in Upper Karnali project. “Any transfer of ownership interest can only happen with clearance from the Government of Nepal and IFC’s consent. As far as we are aware, GMR has not sold any ownership stake,” added Sharma.
Media reports say financially troubled GMR Group has already sold stakes in GMR Upper Karnali Hydropower Limited to EDF, government-owned power utility of France.
Representatives of GMR in Kathmandu were not available for comment.
LENDERS HAVE COMMITTED US$ 1.1 BILLION
A consortium of lenders has issued letter of intent to invest US$ 1.1 billion in Upper Karnali Hydropower Project.
The consortium has already appraisal process, IFC’s Sharma told Republica.
According to Sharma, representatives of IFC, Japan International Cooperation Agency (JICA), European Investment Bank, The OPEC Fund for International Development (OFID), Asian Development Bank, CDC Group (private sector arm of DFID), and four banks and financial institutions from Europe have already visited the project site and held discussion with officials of IBN.
“I have found them very enthusiastic to extend loan for the project,” said IBN CEO Panta said. GMR must achieve financial closure and complete all preparatory works by September 18, according to PDA.