AIIB approves loan of Rs 9b for Upper Trishuli-1
By Ram Hari Gajurel
Nuwakot, June 12: Asian Infrastructure Investment Bank (AIIB) has approved a loan investment of US dollar 90 million (around Rs. 9 billion) in the 216 MW Upper Trishuli-1 Hydropower Project.
The Upper Trishuli -1 is a Rasuwa-based hydroelectric project promoted in the joint venture of Korean and Nepali investments. International financial Corporation (IFC) of World Bank Group is also financing the project.
This will be the first investment of AIIB in the mega infrastructure project of Nepal since its establishment.
The AIIB is a multilateral financial institution established in the leadership of China.
Chief Executive Officer of Nepal Electricity Authority (NEA) Kulman Ghising said that the AIIB was also investing in Tamakoshi-V Hydropower Project (87 MW) to be developed by the NEA and in the distribution system improvement project.
According to Ghising, the cost of Upper Trishuli -1 Project is around US dollar 647.4 million (around Rs. 64 billion).
The project has the promoter’s share of Rs. 19 billion in which there is 90 per cent stake of Korean investors and 10 per cent of Nepali investor Z Consultant.
Nepal Water and Energy Development Company is the promoter of Upper Trishuli -1, Hydropower Project.
The total portion of the debt in the finance mix of 20 per cent equity and 80 per cent loan of the project is US dollar 453.2 million. The promoter is planning to mobilise the entire debt amount from foreign loan.
The government has set the finance mix of 20 per cent equity and 80 per cent loan for the development projects to be developed in foreign capital.
The project has signed power purchasing agreement (PPA) with NEA in US dollar term for the period of 30 years. As per the PPA, the NEA will have to pay 80 per cent of the PPA amount in US dollar and 20 per cent in Nepali currency.
As per the provision of PPA, the NEA and the developer will share the risk associated to change in dollar rate at the ratio of 33.33 per cent and 66.67 per cent respectively.
The developer will provide free electricity to NEA as per its 33.33 per cent risk sharing associated to change in dollar rate.
The project will generate around 1.46 billion unit electricity every year.
Giriraj Adhikari, general manager of the project, informed that major infrastructure works including access roads, residential building and other civil works have been completed so far.
The company is planning to start major construction works of the project from October 2019 after the finalisation of project financing. Construction of the project is expected to complete by 2080 B.S.