Wednesday, February 12, 2020

Banks pledge Rs. 100 billion for Arun III


Kathmandu, Feb. 6
Arun III Hydropower Project has fulfilled the conditions of the financing agreement for the development of the project.
It signed a Memorandum of Understanding (MoU) for financial closure with the Everest Bank and Nabil Bank and five Indian banks on Thursday. The banks have pledged an investment of Rs. 100 billion in the project.
Nepali banks will make about Rs. 15.36 billion investment in the project, said Arun Dhimal, Chief Executive Officer of the project.
State Bank of India, Punjab National Bank, Union Bank, Canara Bank and Exim Bank of India will invest about Rs. 85 billion in the project while Rs. 25 billion will be mobilised by the Sutlej Jal Vidyut Nigam (SJVN), a company owned by the Indian government, as the equity investment.
Nepal Rastra Bank and Investment Board of Nepal had given their permission for the agreement for the financial closure.
The 900-megawatt project is being developed by the SJVN in Sankhuwasabha district.
The dam site of the project is at Numko Fyaksinda and power house at Pukhuwa of Makalu Rural Municipality of Sankhuwasabha district.
The project has achieved about 25 per cent progress even before the financial closure and the entire work is projected to be complete within next three years. If completed within the stipulated time, the project would be the largest hydroelectricity project executed in the country.
Estimated cost of the project is Rs. 104 billion while another Rs. 11 billion will be invested in transmission line construction to supply the electricity from project.
Earlier, the company had said that financial closure of the project would be completed by September 2018. It has got multiple extension of deadline for the same.
Late prime minister of Nepal Sushil Koirala and Indian Prime Minister Narendra Modi had signed an agreement to develop the project in 2014.
According to the Project Development Agreement (PDA) signed in 2014 between the Investment Board of Nepal (IBN) and SJVN, the latter should develop the transmission line. However, the Nepal Electricity Authority (NEA) proposed that it would construct the transmission line for the project and the developer should bear the cost of it. 
Prime Minister KP Sharma Oli and his Indian counterpart Narendra Modi had jointly laid the foundation stone of the project in Sankhusabha district by pressing a switch from Kathmandu during Modi’s Nepal visit in May 2018.
Nepal will get 21.9 per cent, or 197 mw, energy and 29 per cent equity in the project free of cost. The government had distributed Rs. 1.19 billion compensation for land acquisition in the affected areas at Num, Pathibhara and Yaphu in Makalu and Diding and Pukhuwa in Chichila Rural Municipality.


Published in The Rising Nepal daily on 7 February 2020.

No comments:

Post a Comment

Featured Story

Govt prepares primary draft of DRR Policy

Kathmandu, Apr. 29: The government has prepared the preliminary report of the National Disaster Risk Reduction (DRR) Policy and Strategic ...