Management of Foreign Exchange Risk for Build–Own–Operate–Transfer Hydropower Projects in Nepal: A Good-for-All Approach

Financing demands for the increasing number of large-scale build–own–operate–transfer (BOOT) hydropower projects in Nepal have necessitated greater mobilization foreign investment. International investors and lenders perceive significant exchange (FoREX) risk when investing such projects. In various developing countries, FoREX risk-allocation mechanisms offered by public sector allocate risks to project sponsors failed attract substantial The industry is thus need alternative that ensure reasonable returns sponsors, minimize downside sector, maintain electricity tariffs consumers. To address this need, study proposes a feasible good-for-all mechanism presents financial analysis proposed via case an ongoing Nepalese BOOT project. comparative merits over existing are illustrated Nepal. also extended represent different using cost revenue scenarios. results showed should be more effective economic projects, implementation based on current institutional arrangements observed