Debt Financing of Rs. 10.5 Billion Secured for 90-MW Marsyangdi Semi-Reservoir Hydropower Project

February 2, 2025 | Investopaper

A consortium of four banks has finalized a financial management plan to invest Rs. 10.5 billion in a 90-megawatt hydropower project on the Marsyangdi River. The investment agreement was signed on Magh 18, 2081 BS with Kumari Bank leading the initiative.

The financing agreement involves Kumari Bank, Prabhu Bank, Agricultural Development Bank, and Siddhartha Bank. Kumari Bank will contribute Rs. 4 billion, Prabhu Bank Rs. 3 billion, Siddhartha Bank Rs. 2 billion, and Agricultural Development Bank Rs. 1.5 billion. While these four banks have secured their commitments, it is anticipated that additional banks and financial entities will also participate in the project shortly.

The total estimated cost of the project, including interest during the construction period, is projected to be Rs. 20.25 billion, with 75 percent of this amount covered by loans and 25 percent through equity investment.

Marsyangdi Semi-Reservoir Hydropower Project will be constructed along the Marsyangdi River, which flows through Palungtar Municipality in Gorkha, Rainas Municipality in Lamjung, and Bhanu Municipality in Tanahun. The project signed a power purchase agreement with the Nepal Electricity Authority on Karthik 1, 2081 BS.

The required commercial operation date is set for Baisakh, 2081 BS. Once operational, the electricity generated will be transmitted via a 220 kV single circuit line to the NEA’s Markichowk substation, located approximately 11.6 kilometers away.