New Irrigation Management Firm Approved to Operate Modern Mechanical Project

The government has decided to create the Irrigation Management Company Limited to run the country’s new mechanical irrigation project. In Monday’s Cabinet meeting, the Ministry of Energy, Water Resources and Irrigation proposed the company, which was approved. The company will focus on developing and expanding groundwater-based irrigation systems.

Most of the company’s shares will be owned by the federal, provincial, and local governments. Additional investments will come from government agencies, provincial ministries, local units, farmers’ groups, banks, industries, and the Nepal Electricity Authority. The company will work both as a service provider and a production-oriented business.

The project, funded by the government and supported by the Asian Development Bank (ADB), will start by installing 500 deep tube wells in Rautahat and Sarlahi districts. These wells are expected to provide irrigation for around 22,500 hectares of farmland. Energy Minister Kulman Ghising said the project will help increase agricultural production and commercialization, and the service could expand to other districts in the future depending on demand.

The project is estimated to cost USD 160 million (around 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 and the rest as low-interest loans.

The company will have an authorized capital of Rs 3 billion, divided into 30 million shares priced at Rs 100 each. Initially, Rs 200 million will be issued, with 85% for founder shareholders and 15% for ordinary shareholders.

Founder shares will be held by the Energy, Finance, and Agriculture Ministries, the Madhesh provincial government, local governments of Rautahat and Sarlahi, the Nepal Electricity Authority, and the Agriculture Development Bank. Ordinary shares will be reserved for farmers and agricultural entrepreneurs in the project area.

The company will be managed by a seven-member board, chaired by the Secretary of the Ministry of Energy (Irrigation Division). The board will also include representatives from the Department of Irrigation, Finance and Agriculture Ministries, Madhesh provincial government, local governments of Rautahat and Sarlahi, and farmers or user groups. The CEO will act as the member-secretary.