ICRA Nepal Limited has reaffirmed the issuer rating of Lumbini Cable Car Limited (LCCL) at [ICRANP-IR] B+, indicating a high risk of default with respect to the timely servicing of financial obligations. The rating reflects the agency’s assessment of the company’s overall creditworthiness and is not specific to any particular debt instrument.
Understanding the Credit Rating
According to ICRA Nepal, ratings in the [ICRANP-IR] scale range from AA to C, with modifiers such as “+” or “–” used to indicate relative positioning within each category. In this structure, [ICRANP-IR] B+ is one notch higher than [ICRANP-IR] B, while B- is one notch lower, reflecting slight variations in credit risk perception within the same rating band. The reaffirmation of the B+ rating suggests that while LCCL continues to operate in a financially constrained environment, its credit profile remains stable within the assessed risk category.
Overview of the Lumbini Cable Car Project
Lumbini Cable Car Limited, established in April 2004, operates a cable car system connecting key tourism and religious destinations in Lumbini Province. The project’s base station is located in Rupandehi district, while the top station lies in Palpa district, offering panoramic access to one of Nepal’s emerging tourism corridors. The cable car segment officially began commercial operations on May 29, 2023, marking a significant milestone in the company’s long-term infrastructure and tourism development plan.
Integrated Tourism and Hospitality Expansion
Beyond its operational cable car service, the company is also advancing plans for a five-star category hotel at the upper station of the project in Palpa. The proposed hospitality facility is currently in its initial design phase and is expected to complement the cable car service by enhancing visitor experience and encouraging longer stays in the region.
The integrated development model aims to combine transportation infrastructure with premium hospitality services, positioning the project as a unique tourism hub in Lumbini Province.
Ownership and Promoters
The company is primarily promoted by prominent business figures, including Chandra Prasad Dhakal, Ramesh Sharma, and Hem Raj Dhakal. They hold majority stakes in the company both individually and through closely held corporate entities. Their involvement reflects strong private sector interest in developing tourism-linked infrastructure projects in Nepal, particularly those that integrate transport and hospitality services.
Credit Risk Outlook
ICRA Nepal’s reaffirmation highlights the company’s ongoing exposure to financial and operational risks, particularly as it continues to expand its infrastructure and hospitality components. While the cable car is operational and generating activity, the overall financial profile remains sensitive to project execution timelines, revenue generation capacity, and broader tourism demand. The planned hotel project, once completed, is expected to enhance revenue diversification and improve the project’s long-term financial sustainability.
Tourism and Regional Development Potential
The Lumbini cable car project is considered strategically important for boosting tourism connectivity between Rupandehi and Palpa districts. By improving access to religious and scenic destinations in Lumbini Province, the project is expected to contribute to regional tourism growth and local economic development.
Industry stakeholders believe that the integration of transport infrastructure with high-end hospitality services could further strengthen Nepal’s tourism offerings, particularly for pilgrims and leisure travelers visiting the Lumbini region.
While the [ICRANP-IR] B+ rating underscores a relatively high credit risk, it also reflects the company’s ongoing operational presence and development potential. Future rating movement will likely depend on the successful execution of the hotel project, revenue stability from cable car operations, and overall improvement in financial performance. ICRA Nepal stated that the rating should be viewed as an independent opinion on creditworthiness rather than an endorsement or investment recommendation.
