NMB Bank Ltd with its focus in Energy Sector Development is one of the pioneer banks promoting renewable energy in the country, catering best financial services to meet capital expenditure and other financial requirements of the customer. Currently the Bank has financed 32 different hydropower projects, which are in various stages and is hence contributing to the national agenda of “Ujyalo Nepal” (Lightened Nepal).The Bank has strategic intent to increase its exposure in Energy sector in future as well primarily targeting to develop hydropower projects with an installed capacity more than 10 MW.
In order to facilitate the prospective customers we have drafted basic checklist of documents that the developer/customer needs to submit at the Bank (Energy Sector Department, Head Office,Babarmahal, Kathmandu). These checklist which are basically associated with the developers’ requests at various stages of the Project developments. The standard lists may not be exhaustive and hence be project specific. This shall be well notified by the Bank during the course of the financing procedure.
LOI is requested by the developer/customer as per the requirement of Nepal Electricity Authority (NEA) for the initial processing of; Connection Agreement and/or Power Purchase Agreement (PPA) and/or Generation License. The general validity of the LOI issued by the Bank is 1 year (from the date of issue) and the Bank shall charge standard fees (related to the size of the Project) which shall be duly notified.
The decision to finance the project shall be aligned with; satisfactory project review (satisfactory outcome of Due Diligence Report), adherence to the NRB’s policies and NMB Bank’s internal policies and approval from the Bank’s competent authority.
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SN |
Description of Document |
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1 |
LOI request letter (mentioning the purpose) |
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2 |
Maintenance of current account (non interest bearing) at NMB under the company’s name for settlement of LOI fee |
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3 |
Salient feature of the project/Executive Summary of the feasibility study |
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4 |
List/Name of the project promoters/Share Lagat |
BG is requested by the developer/customer as per the requirement of NEA for the execution of PPA. NEA may claim the guarantee as per the clauses in PPA which generally cover: (NEA may include additional clauses as well).
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SN |
Description of Document |
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1 |
Bank Guarantee request application (Bank’s standard form) |
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2 |
Project Company’s Board Minutes (with decision authorizing the company representative to execute relevant documents of Bank) |
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3 |
Feasibility Study Report |
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4 |
List/Name of the project promoters& Board of Directors (BoDs)/Share Lagat |
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5 |
Company Registration Certificate |
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6 |
PAN |
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7 |
MOA and AOA |
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8 |
Citizenship certificates of BODs, CV, KYC with net worth & brief profile of them along with 3 generation details; Board Structure |
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9 |
Survey License |
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10 |
Connection Agreement |
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11 |
Draft PPA/Energy Table |
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12 |
Brief Status of project development till date (equity injected, land acquired, access road, infrastructural development and others) |
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13 |
Total Project Cost/Cost breakdown details |
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14 |
Financial Projection of the Project |
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15 |
Guarantee format provided by NEA |
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16 |
Letter issued by NEA for submission of Bank Guarantee |
Requirement Three (Processing and Finalization of Project Loan)
Upon receiving the mandate from the developer/customer, the Bank shall proceed to arrange the required debt finance for the project as the Lead Arranger or Sole Financer. The procedure requires the Bank to thoroughly analyze the following documents:
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SN |
Description of Document |
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1 |
Loan request letter (with proposed Debt/Equity Mix) |
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2 |
AGM minutes for the debt facilitation (including OD loan) through consortium led by NMB Bank and board minutes with decision of authorized person to sign bank documents |
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3 |
Feasibility Study Report (Entire Volume including the annexes with drawings) inclusive of Detailed Bill of Quantity (BoQ), unit rate estimation, project cost breakdown and investigation/ test reports (if any) |
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4 |
List/Name of the project promoters& Board of Directors (BoDs)/Share Lagat |
|
5 |
Company Registration Certificate |
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6 |
PAN |
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7 |
MOA and AOA |
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8 |
Citizenship certificates of BODs, CV (with details on any past experience on hydropower project development), KYC with net worth & brief profile of them along with 3 generation details; Multiple Borrowing Declaration, Board Structure |
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9 |
Survey License |
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10 |
Connection Agreement |
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11 |
PPA |
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12 |
Brief Status of project development till date (equity injected, land acquired, access road, infrastructural development and others) |
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13 |
EIA/IEE (as applicable) – Environment study reports |
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14 |
Financial Projection of the Project |
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15 |
Tax Clearance Certificate-latest |
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16 |
Audited Financials of FY- latest (last 2 years if applicable) |
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17 |
Generation License |
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18 |
Transmission survey license |
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19 |
Management Structure of the Project Company |
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20 |
Details on past experience (hydropower project development) |
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21 |
Equity Injection Plan and brief information on the source |
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22 |
Document detailing construction methodology & planned contractual arrangement |
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23 |
Project Implementation/ Construction Plan and Schedule in line with commitments in the PPA |
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24 |
Detail Project/Design Report and/or Due Diligence Report (as and when applicable) |
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25 |
Technical (Design/Supervision) Consultant’s profile |
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26 |
Contract Documents (HM/EM/civil/TL/Project supervision) – as and when applicable |
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B |
Documents of major shareholding company (stake more than 5%) |
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1 |
Company Registration Certificate |
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2 |
PAN Certificate |
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3 |
MOA, AOA |
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4 |
Share Lagat and Sanchalaklagat with brief detail on major promoters |
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5 |
Audited Financials of FY- (last 2 years) |
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6 |
Tax Clearance Certificate-latest |
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7 |
AGM minutes or Special Resolution Minutes (bisesh sadharan sabha) to provide corporate guarantee for the proposed loan from consortium led by NMB Bank |
*NMB Bank shall proceed with analysis of the project with deficit documents. The proposed developer shall arrange to submit entire set of above mentioned documents before the final approval of the debt.
