Kathmandu; Hydro Village Private Limited has signed a Syndicated Credit Facilities Agreement (SCFA) with a consortium of five different financial institutions for the implementation of 57.3 MW Myagdi Khola Hydropower Project (MKHP) in the Myagdi district of Western Nepal earlier this week.
The government of Nepal has accorded high priority to enhance the domestic electricity market. The present per capita consumption of Nepali consumers (less than 400 kWh/capita) is among lowest in South Asia and total installed capacity in the country is merely in the tune of 2200 MW; against huge potential over 43,000 MW commercially viable hydropower potential. Nepal aims to graduate from Least Developed Country (LDC) to a middle-income country status by 2030, where the domestic electricity demand will be over 6000 MW.
As per the SCFA, Nepal Bank Ltd. will lead the consortium comprising Mega Bank Ltd, Agriculture Development Bank Ltd, Employees Provident Fund and Nepal SBI Bank Ltd. The total amount of the loan is USD 66 million. The project is estimated to cost around US$88 million and generate 335 GWh of electricity per annum.
Speaking at the agreement signing ceremony, Sushil Pokharel Managing Director of Hydro Village Private Limited said the project is unique in various ways and could also be a “model project” in terms of sustainability in Nepal. “We are closely following international guidelines and have conducted a rigorous assessment of impacts on river ecosystems and people,” he said. Pokharel further stated that developers were also keen on bringing visible change to the lives of the local community.
At present, the project site is disconnected from the national grid of electricity and has no road access. The project will generate direct employment for the locals and is committed to uplift the lives of the local community by ensuring road access, electricity, education, health facilities among others.
Bhanu Pokharel, Managing Director of Urja Developers Pvt. Ltd., strategic partner in the MKHP stated that Urja Developers will have an instrumental role in the implementation of the project and has proven track records on managing such hydropower projects. “We are committed to sustainable development of clean energy and have been advancing towards adopting international best practices with support from International Finance Corporation (IFC),” he said.
Urja Developers, the government-owned Hydroelectricity Investment and Development Company Limited (HIDCL), Singapore-based investment firm Aqua Ventures, Bizbell and Simrik Ventures will invest US$ 22 million equity funds for the development of MKHP.
The project construction is expected to be completed by the end of 2025 and will create direct employment to more than 1500 people during the construction.