The Nepal Electricity Authority (NEA) is developing the 1,063 MW Upper Arun Hydropower Project in Bhote Khola Rural Municipality, Sankhuwasabha, and has proposed allocating Rs 12.95 billion in shares to non-resident Nepalis (NRNs) and Nepalis working abroad.
The project’s total cost is estimated at Rs 239.79 billion, with 30% equity (Rs 71.94 billion) and 70% loans (Rs 167.85 billion). Of the equity, 51% will be held by founder shareholders and 49% will be issued to the public. From the public portion, 18% is reserved for NRNs and overseas workers, 18% for the general public, 10% for affected areas, 2% for disadvantaged regions, and shares worth Rs 719.4 million for project staff.
NEA will hold 41% of the founder shares. Other founder investors include subsidiary companies, the Employees Provident Fund, Citizen Investment Fund, insurance companies, Nepal Telecom and local governments.
Project financing will come entirely from domestic sources, including concessional co-financing (45%), energy bonds (30%), and bank co-financing. The project is expected to generate Rs 27.9 billion in its first commercial year, producing 453 million units of electricity at an initial PPA rate of Rs 6.3 per unit.
Construction is underway, including a 21 km access road and a 70-meter steel arch bridge connecting the site to the Koshi Highway.
