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IFC, partners provide $453 million to support 216-MW hydroelectric plant in Nepal

IFC, a member of the World Bank Group, and a consortium of other lenders have finalized a $453 million debt financing package that will support the construction of a 216-MW hydroelectric plant in central Nepal.

Operation of the Upper Trishuli-1 plant will increase Nepal’s electricity supply by one-third from today’s levels and provide clean, reliable power to some 9 million people, IFC says, and this is part of a larger effort by IFC to create markets and fight poverty in the country.

The financing is being provided to the privately-owned Nepal Water and Energy Development Company. The firm will develop and operate a 216-MW, run-of-river hydroelectric plant on the Trishuli River about 70 km north of Kathmandu. The Upper Trishuli-1 project’s financing structure, competitive tariffs and use of internationally accepted contract standards is expected to set a standard for future hydropower projects in Nepal, IFC says.

“This project is a game-changer for Nepal,” said Barshaman Pun, Nepal’s Minister of Energy. “Not only will it power hundreds of thousands of homes and businesses, but it will also serve as an of example of how private companies can help Nepal expand its hydropower sector and attract much needed foreign direct investment.”

IFC is the lead arranger of the debt package, which includes eight other lenders, and is one of the largest foreign direct investments in Nepal’s history.

In June 2019, The Asian Infrastructure Investment Bank’s (AIIB) Board of Directors approved a loan of up to US$90 million for the Upper Trishuli-1 Hydropower Project, AIIB’s first project in Nepal.