Loan Agreement Signed for 66.3 MW Middle Kaligandaki Hydropower Project

KATHMANDU: Co-financing banks and promoter companies have signed a significant loan agreement to facilitate the financial management of the 66.3 MW Middle Kaligandaki Hydropower Project. The project, situated on the Kaligandaki River in Annapurna Rural Municipality of Myagdi district, will be developed through Hydro Support Pvt. Ltd., a company under the IME Group.

The agreement was formalized 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, during a ceremony on Friday evening.

The co-financing banks are led by Nabil Bank Limited, with Everest Bank, Nepal Investment Mega Bank, Nepal Bank, Rastriya Banijya Bank, and Prabhu Bank also participating.

The co-financing banks will collectively invest Rs. 11.12 billion in the project, covering interest during the construction period. The investment breakdown includes Rs. 3.12 billion from Nabil Bank, Rs. 2 billion each from Everest Bank and Nepal Investment Mega Bank, and Rs. 1 billion each from Nepal Bank, Rastriya Banijya Bank, and Prabhu Bank. Additionally, the Hydroelectricity Investment and Development Company (HIDCL) will contribute Rs. 1 billion.

The project’s estimated cost is Rs. 12.93 billion, with 75 percent sourced from loans and 25 percent from equity. Both the IME Group and the general public will provide equity investment.

The Middle Kaligandaki Hydropower Project is scheduled for completion within four years, starting from 2024.

According to the power purchase agreement with the Nepal Electricity Authority, the electricity purchase rate is set at Rs. 8.40 per unit during the winter and Rs. 4.80 per unit during the rainy season. The project is expected to generate an annual income of Rs. 2.42 billion from electricity sales.

Preparatory work for the project is currently underway. Speaking at the signing ceremony, Nabil Bank CEO Gyanendra Dhungana emphasized the bank’s investment due to the project’s promising prospects. IME Group Chairman Chandra Prasad Dhakal highlighted the project’s attractiveness, noting that road construction is unnecessary and the transmission line is already in place.

The project’s electricity will be connected to the Dana substation of the Nepal Electricity Authority, with the power house being constructed underground.