The financial management of the 42-megawatt Upper Modi A hydropower project to be constructed in Annapurna Rural Municipality of Kaski through the subsidiary company of Nepal Electricity Authority has been completed.
The estimated cost of the project, including interest during the construction period, is Rs. 10.57 billion, 70 per cent of which has to be raised from debt and 30 per cent from equity.
The amount under the equity will be invested by the NEA and the general public.
NMB Bank and Hydroelectricity Investment and Development Company Limited (HIDCL) will invest Rs. 7.4 billion in the project through co-financing with interest during the construction period.
Out of the total loan, NMB Bank will invest Rs. 4.4 billion and HIDCL of Rs. 3 billion.
A tripartite loan agreement for the project was signed between promoters of the project, Modi Hydropower Company Limited, NMB Bank and HIDCL in the presence of the Minister of Energy, Water Resources and Irrigation Shakti Basnet on Monday evening.
On the occasion, Minister Basnet said that the government was working with clear guidelines to increase domestic consumption of electricity and to sell the surplus electricity to India and Bangladesh.
He said that the export of 10,000 megawatts of electricity to the Indian market has been ensured in 10 years, and now the work is being carried forward with special attention to the increase in production and domestic consumption and export.
Kul Man Ghising, Managing Director of the NEA and Chairman of Modi Hydropower Company, said that in the coming days, Nepal’s hydropower development will gain a new height.
“Through the Authority, the construction of projects with 3-digit capacity is now progressing to 4-digit capacity, and the financial management of the 1,061-megawatt Upper Arun and 635 megawatt Dudhkoshi reservoir hydropower project are to be carried out by 2024,” Ghising said.
About 16,000 megawatts of projects through the Authority and its subsidiary companies are at the stage of study, construction and investment management, he said.
Chief Executive Officer of HIDCL Arjun Gautam emphasised that the common understanding that government projects are not completed on time should be proven wrong by completing the construction of the project on time.
He said that the company is ready to meet the government’s target of producing 28,500 megawatts of electricity by 2035.
Sunil KC, CEO of NMB Bank, said that it is a historic opportunity and a milestone for private banks to invest in the project advanced by the Authority.
The target is to complete the construction of Upper Modi A hydroelectric project within four years from the start of construction. So far, the preparatory work for the project is being done.
The evaluation of the technical proposal submitted by the bidder for the civil and hydromechanical works under Phase-1 of the project is in the final stage, said the company.
Project site offices and residences are being constructed.
The approval has already been given for the acquisition of private land and the use of land in the forest area.
An agreement has been reached with NEA Engineering Company for the construction supervision as consultant of the project. The company will also construct the 18.2 MW Upper Modi Hydroelectric Project.
