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Kathmandu, Aug 8: In a major breakthrough for Nepal’s private energy sector, the 341-megawatt Budhigandaki semi-reservoir hydropower project has achieved financial closure. Led by Nepal Investment Mega Bank, a consortium of 10 banks and financial institutions has pledged a total loan of Rs 52.5 billion. The estimated cost of the project is Rs 70 billion.

Breakdown of commitments: Nepal Investment Mega Bank will invest Rs 10 billion, Nabil and Laxmi Sunrise Banks Rs 8 billion each, Global IME Rs 7 billion, Hydro Electricity and Development Company and Machhapuchchhre Bank Rs 4 billion each, Citizen, Infrastructure, and Prabhu Banks Rs 3 billion each, and Agricultural Development Bank Rs 2.5 billion.

A loan agreement was signed in Kathmandu on Thursday between the promoter, Times Energy, and the consortium. Times Energy director Sushil Thapa and Nepal Investment Mega Bank CEO Jyotiprakash Pandey signed the deal. The loan covers 75 percent of the project cost. The remaining 25 percent, Rs 17.5 billion, will come as equity from the promoters.

Sahas Urja owns 51 percent of Times Energy and will invest accordingly. This is Nepal’s largest-ever private hydropower project in terms of financing. Previous closures were for the 285 MW Upper Tamor and the 216 MW Upper Seti projects. The biggest operating private project so far is the 86 MW Solu Khola Dudhkoshi, also built by Sahas Urja, which began production in early 2023. Sahas acquired a majority stake in Times Energy in December 2023.

The Budhigandaki project received construction and generation permits in late 2023. It has also signed a power purchase agreement with the Nepal Electricity Authority (NEA).

Located in Gorkha, the project site is 170 km from Kathmandu. The dam will be built in Chumnubri Rural Municipality Ward 3, while the powerhouse will sit in Dharche Ward 3. They are linked by a 10 km road, and the powerhouse will be underground.

Technical specs of the project are: The project will have a 398-meter head, a 6.9 km tunnel, and six turbines with a combined capacity of 56.8 MW each. The reservoir will hold 1.76 million cubic meters of water, allowing 6 hours of full-capacity generation daily. Annual output is projected at 1,867.77 GWh—320.3 GWh in dry months, 243.43 GWh in semi-dry, and 1,304.04 GWh during the rainy season. Design discharge is 100.25 cubic meters per second.

According to the company, both physical and financial risks are minimal. The per-megawatt cost is Rs 205.3 million. The NEA has agreed to pay Rs 4.80 per unit in the rainy season, Rs 8.40 in winter, and Rs 10.55 during peak hours. The project is expected to deliver a return on investment of 16.99 percent and recover the base investment in 5.5 years. Its current net valuation stands at Rs 23.24 billion.

Shorter access road, shorter tunnel, strong head, and proximity to load centers make this an attractive investment both technically and financially. The plant is expected to begin commercial production by January 1, 2031 (Poush 17, 2087).

People’s News Monitoring Service