Research · Hydropower
Chilime Hydropower Company Limited (CHCL)
A full Canon Score walkthrough of a 22.1 MW run-of-river plant on the Chilime Khola in Rasuwa district — commissioned in August 2003, and a useful test of whether a scoring rubric built for banks survives contact with an asset that lives or dies by rainfall, a fixed tariff, and a royalty schedule that steps up on a calendar. Scored on 25 August 2026, one day before the Bhotekoshi flood damaged the plant — see the notice below.
Analysis dated August 2026, using CHCL’s publicly reported figures at that time. Hydropower numbers move with the water year and with each quarterly disclosure, so re-derive every figure from current filings before acting. This is published research, not investment advice.
This analysis predates a flood that damaged the plant. On the morning of 26 August 2026 a sudden flash flood surged down the Bhotekoshi from the Tibet side of the border, tearing through Timure and Syabrubesi in Rasuwa. The Nepal Electricity Authority confirmed damage to the Chilime Hydropower Centre alongside Rasuwagadhi, Trishuli 3A and the Trishuli 3B hub substation, and generation was halted. The Chilime–Trishuli 66 kV line and the Chilime 220 kV hub tower were also affected. Preliminary reports put 11 to 15 hydropower projects out of action and roughly 431 MW disconnected from the national grid. The disaster caused heavy loss of life across the district.
The full extent of damage to CHCL specifically, the cost and timeline of repair, the revenue lost while generation is suspended, and what insurance recovers are all unknown at the time of writing. Every score below was assigned on 25 August 2026, the day before the flood, and none of it reflects this event. Treat the 62/100 as a historical record of how the company scored beforehand, not as a current assessment. The figures most likely to move are Financial Strength, Growth Trajectory and Dividend Discipline; Sector & Business Model Durability deserves rereading in light of what single-asset exposure to one river actually means.
This page will be updated once CHCL discloses a damage assessment and a restoration timeline.
Canon Score: 62 / 100
Chilime lands in the Adequate band (55–69): investable, but size the position carefully and watch the weak dimensions. It scores nine points below Nabil Bank, and the gap is almost entirely explained by two dimensions rather than by broad weakness.
| Dimension | Possible | Awarded |
|---|---|---|
| Financial Strength & Profitability | 20 | 11 |
| Governance & Promoter Behaviour | 15 | 12 |
| Liquidity & Tradability | 10 | 8 |
| Valuation Reasonableness | 15 | 4 |
| Sector & Business Model Durability | 15 | 12 |
| Growth Trajectory | 15 | 5 |
| Dividend & Capital Return Discipline | 10 | 10 |
| Canon Quality Score | 100 | 62 |
What the score is saying
Dividend discipline is perfect — 10 out of 10
Paid every year, with a cash component running near half of earnings per share, and funded from genuine operating profit rather than from borrowing or reserves. For an operating hydropower plant with its construction debt behind it, this is exactly the behaviour the dimension is designed to reward.
Growth is the structural problem — 5 out of 15
A single completed run-of-river plant has a hard ceiling. Once commissioned, revenue growth can only come from higher plant availability or from the contractual tariff escalation built into the Power Purchase Agreement — and that escalation is time-bound, commonly capped at seven or eight annual steps before the tariff plateaus. Profit and earnings per share have moved in both directions across recent fiscal years, with a real decline in one year alongside modest growth in another, and no outright loss year. That pattern is honestly scored as erratic rather than as a growth trajectory.
Valuation is the weakest dimension — 4 out of 15
Hydropower on NEPSE carries a persistent sentiment premium. The rubric does not care how popular a sector is; it asks whether today’s price already reflects, or overreflects, the quality the other six dimensions describe. Here it judges that it does.
Chapter 84 scored Durability at 12 of 15 while noting the plant sits on a single river “that cannot be moved, duplicated, or hedged if something goes badly wrong with that one location.” The August 2026 flood is precisely that scenario. A bank with thousands of loans spreads its risk across borrowers; a run-of-river plant concentrates it into one valley. That is a permanent structural feature of the asset class, not a one-off, and it is the strongest argument in this analysis for sizing hydropower positions conservatively regardless of how attractive the dividend record looks.
Every licensed Nepali generator pays capacity and energy royalty to the government, and both step up sharply from the sixteenth year of commercial operation: capacity royalty from roughly NPR 100 to NPR 1,000 per kW per year, and energy royalty from about 2 percent to about 10 percent of revenue. That is a structural shift in the cost base arriving on a fixed calendar, regardless of operating performance. An investor anchoring their expectations to the margin a plant reports in year 6 or year 8 is modelling a company that will not exist by year 16.
Read the full analysis
This page summarises the conclusion. The complete walkthrough — PPA structure, the take-or-pay distinction, depreciation and the IFRIC 12 concession question, the royalty schedule, and every sub-score justified — is Chapter 84 of The Investor’s Canon.
Read Chapter 84 in full The hydropower financial model All research
Independent research published for educational purposes. Not investment advice, not a recommendation to buy or sell, and not a price target. The Canon Score measures business quality and governance — it is explicitly not a prediction of where a share price is headed. Verify every figure against current filings before making any decision.