Financing secured for 66.3 MW Middle Kaligandaki, target to complete within four years

By A Staff Reporter

Kathmandu, June 23: The co-financing banks and promoter companies have signed a loan agreement to arrange financial management of the 66.3 MW Middle Kaligandaki Hydropower Project to be built on the Kaligandaki river in Annapurna Rural Municipality of Myagdi district through Hydro Support Pvt. Ltd., a company of the IME group.

The agreement was signed by IME Group Chairman Chandra Prasad Dhakal on behalf of Hydro Support Pvt. Ltd. and Gyanendra Dhungana, Chief Executive Officer of Nabil Bank, the lead bank for co-financing, on behalf of the banks amidst a function Friday evening. The co-financing banks are led by Nabil Bank Limited, while the other participating banks are Everest Bank, Nepal Investment Mega Bank, Nepal Bank, Rastriya Banijya Bank and Prabhu Bank.

The co-financing banks will invest Rs. 11.12 billion in the project with interest during the construction period. 

Of the total loans, Nabil Bank will invest around Rs. 3.12 billion, Everest Bank Rs. 2 billion, Nepal Investment Mega Bank Rs. 2 billion and Nepal Bank, Rastriya Banijya Bank and Prabhu Bank Rs. 1 billion each. 

Similarly, Hydroelectricity Investment and Development Company (HIDCL) will have an investment of Rs. 1 billion.

Apart from interest during the construction period, the estimated cost of the project is Rs. 12.93 billion, 75 per cent of which has been raised from loans and 25 per cent from equity. 

IME Group and general public will invest as an equity in the project.

The construction of Middle Kaligandaki Hydropower Project is set to be completed within four years starting from 2024.

Based on the power purchase agreement with the Nepal Electricity Authority, electricity purchase rate during the winter is Rs. 8.40 per unit and the rainy season is Rs. 4.80 per unit.

An annual income of Rs. 2.42 billion will be generated from the sale of total production of electricity. 

So far, the preparatory work for the project is being done.

Speaking at the signing ceremony, Chief Executive Officer (CEO) of Nabil Bank Gyanendra Dhungana said that the bank was going to invest because the project was good.  IME Group Chairman Chandra Prasad Dhakal said that the project had a special feature. 

He said that the project is very attractive because there is no need to construct roads in the project and the transmission line had already been built.

The electricity of the project, which will be an underground power house, will be connected to the Dana substation of the Nepal Electricity Authority.