KATHMANDU: The government has decided to establish the Irrigation Management Company Limited to operate the country’s latest mechanical irrigation project. Monday’s Cabinet meeting approved the proposal from the Ministry of Energy, Water Resources and Irrigation to set up the company, which will be responsible for developing and expanding groundwater-based irrigation systems.
The company will have majority shareholding from the federal government, provincial governments and local levels. Additional investments will come from various government bodies, provincial ministries, local units, farmers’ groups, financial institutions, industrial stakeholders and the Nepal Electricity Authority. It will function both as a service provider and a production-oriented enterprise.
Under the new project, which is being implemented with government investment and support from the Asian Development Bank (ADB), the first phase will install 500 deep tube wells in Rautahat and Sarlahi districts. This groundwater-based system is expected to provide irrigation to around 22,500 hectares of farmland. Energy Minister Kulman Ghising said the project would support agricultural commercialization and help increase production, adding that the service could later be expanded to other districts depending on demand.
The estimated cost of the project is USD 160 million, or about Rs 22.4 billion. The government will invest Rs 4.93 billion, while ADB will provide Rs 17.47 billion, including Rs 2.10 billion in grants, with the remainder as concessional loans.
The company will have an authorized capital of Rs 3 billion, divided into 30 million ordinary shares priced at Rs 100 each. The immediate issued capital will be Rs 200 million, with 85 percent held by founder shareholders and 15 percent by ordinary shareholders.
Founder shares will be held by the Energy Ministry, the Finance and Agriculture Ministries, the Madhesh provincial government, local governments in Rautahat and Sarlahi, the Nepal Electricity Authority and the Agriculture Development Bank. Ordinary shares will be reserved for agricultural entrepreneurs and beneficiary farmers in the project area.
A seven-member board will oversee the company. It will be chaired by the Secretary of the Ministry of Energy (Irrigation Division) and include representatives from the Department of Irrigation, the Finance and Agriculture Ministries, the Madhesh provincial government, local governments of Rautahat and Sarlahi, and a representative from farmer or user groups. The chief executive officer will serve as member-secretary.
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