Financing for 216MW run-of-river Hydropower Project in Nepal

Nepal Water & Energy Development Company Pvt. Ltd has received financing from the International Finance Corporation (IFC) and a lending consortium for the construction of 216 MW Upper Trishuli-1 run-of-river Hydropower Project.

IFC has led a US$453 million debt financing package that includes nine international lenders. The project received more than US$100 million in support from the IDA Private Sector Window, an instrument that allows IFC and the Multilateral Investment Guarantee Agency (MIGA) to extend its reach. IFC is providing a total of US$190 million. MIGA will provide US$135 million in guarantees to cover the political risk for the sponsors. Among the financiers are Export and Import Bank of Korea, the Asian Development Bank, the Asian Infrastructure and Investment Bank, the Korea Development Bank, the UK’s CDC, Dutch entrepreneurial development bank FMO, the OPEC Fund for International Development and France’s Proparco. The project is also supported by the Finland-IFC Blended Finance for Climate Program and the Climate Investment Funds.

When completed, the Upper Trishuli-1 Hydropower Project, known as UT-1, will generate electricity sufficient to supply up to 9 million people (based on 2017 consumption levels). It will also set new environmental and social benchmarks for Nepalese hydropower projects that follow.

IFC, Korea South-East Power Co Ltd, Daelim Industrial Co Ltd and Kye-Ryong Construction Industrial Co Ltd own a 90% stake in the project company Nepal Water & Energy Development Company (NWEDC), while the remaining 10% is in the hands of a local stakeholder.

The project is expected to be operational by 2024. Once completed, the company will sell power generated by UT-1 to Nepal’s national public utility company, Nepal Electricity Authority (NEA), under a thirty-year power purchase agreement.