FACTOR INFLUENCING THE FINANCIAL PERFORMANCE OF SMALL HYDROPOWER PROJECTS IN NEPAL

Abstract

This study examines the financial performance of small hydropower projects in Nepal, focusing on the impact of various factors such as client-related, consultant-related, project-related, external environment, and contractual relationships. The objective is to identify and analyze these factors to provide insights into the financial viability and profitability of such projects, particularly given Nepal's reliance on hydropower and the global push for sustainable energy. The research design combines descriptive statistics and causal-comparative analysis to evaluate the impact of the aforementioned factors on financial performance. The population includes the workforce of 53 small hydropower projects in Nepal, with a sample size of 200 respondents from various stakeholders. Data collection was conducted using a structured questionnaire survey with a Likert scale to gather reliable quantitative data from the hydropower and electricity sector stakeholders. The data was meticulously analyzed using Microsoft Excel and SPSS, employing statistical tools such as descriptive statistics, correlation analysis, and multivariate regression modeling. The research framework established relationships between the dependent variable, financial performance, and independent variables including project-related factors, contractual relationships, client-related factors, consultant-related factors, and the external environment. The results indicate that client-related and consultant-related factors have a strong and significant positive impact on financial performance, underscoring their crucial role in enhancing financial outcomes. Conversely, project-related factors, the external environment, and contractual relationships show weaker and statistically insignificant impacts, suggesting they are less influential in determining financial performance. This study has both practical and theoretical implications. Practically, it highlights the importance of client-related and consultant-related factors in boosting financial performance. Theoretically, it reinforces the significance of these factors in project management and financial performance frameworks. It is recommended that project stakeholders prioritize improvements in client and consultant-related aspects to enhance financial outcomes. Improved communication, expertise, and collaboration between clients and consultants can lead to more successful project execution.

Keywords: Small hydropower projects, Financial performance, Client-related factors, Consultant-related factors.