Impact fund invests Nepal hydro player

Dolma will take a minority stake in the company, which is controlled by Sanima Hydro and is developing a 28-megawatt project known as Lower Likhu. It is Dolma’s second hydro deal in the country after a $1.1 million investment last year in Suri Khola, a 6.4 MW operation.

Nepal has less than 1,000 MW of on-grid capacity currently commissioned, but domestic demand is estimated to reach about 10,000 MW within 10 years. Dolma is aiming to attract more foreign investment to the sector in part by demonstrating the country's natural competitive advantages.

“Nepal needs to build a lot more capacity in power generation but the Himalayas offer a unique environment for that because of the force of the water already coming down the slopes,” Tim Gocher, Dolma’s founder and CEO, said. “We’re also very comfortable with the developer Sanima, which already has experience building and commissioning projects.”

Sanima currently manages five hydro projects in Nepal, the largest of which has a planned capacity of 415 MW. Lower Likhu will use a run-of-river operational system, which creates a smaller environmental impact by exploiting seasonal currents without a reservoir.

Dolma claims to be the first international PE fund purely focused on Nepal. Its debut vehicle has a corpus of $26 million and has been 73% committed across five companies since late 2014, with deployments ranging from $1-3.8 million per transaction. LP backers include European banks and high net worth individuals.

The fund focuses on balancing Nepal’s trade deficit with India by targeting companies that substitute imports while also empowering the local population. In addition to the hydro projects, previous investments include a hospital, a pharmaceutical manufacturer and a cloud computing technology company.

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