Rs 26 billion secured for two major hydel projects in past week

KATHMANDU, JANUARY 7: Investments in hydropower projects are gaining momentum, with banks and financial institutions (BFIs) signing agreements for loans worth Rs 26 billion for two major projects in the past week.

The 49.95 MW Dana Khola Hydropower Project, promoted by Lalupate Hydropower Company, has secured financial closure. According to Mohan Kumar Dangi, a promoter and vice president of the Independent Power Producers Association of Nepal (IPPAN), BFIs have committed Rs 9.96 billion to the project. Of this, Rs 740 million will be issued as shares to project-affected local residents, while Rs 1.74 billion will come from the operators and promoters.

Similarly, financial arrangements have been finalized for the 102 MW Upper Marshyangdi-1 Hydropower Project, located in Lamjung and promoted by the Upper Marshyangdi Hydropower Company. The deals were signed with various banks for a total investment of Rs 16 billion.

As per the promoting company, Laxmi Sunrise Bank will invest Rs 7 billion, Global IME Bank Rs 6 billion, and Prabhu Bank Rs 3 billion. The total project cost is estimated at Rs 21.4 billion, with 74.77% funded by banks and 25.23% by the promoters.

Both projects are progressing steadily. The Dana Khola project has already obtained its Power Purchase Agreement (PPA) and necessary permits, with construction set to be completed within four years. Upon completion, it is expected to generate 583.03 GWh of electricity annually.

IPPAN President Ganesh Karki noted that financial management for other hydropower projects is also advancing rapidly. He highlighted that arrangements for 20 hydropower projects have been completed in recent months, with several others currently in process.