Abu Dhabi Fund okays US$ 30m loan for Tanahun Hydropower Project


    upper SetiKATHMANDU, March 10:The Abu Dhabi Fund for Development (ADFD) has endorsed a decision of its board of directors to provide US$ 30 million to Nepal for the development of 140 megawatts Tanahun Hydropower Project.

    “We have received a letter from ADFD,” a high-ranking official at the Ministry of Finance (MoF) told Republica. “It formally notifies us that ADFD has decided to provide loan to us.” ADFD, a national entity of the United Arab Emirates, has sent a letter to the government notifying that it took the decision last week but it doesn´t indicate anything about interest rate and maturity period of the loan.

    The government had sought loan from ADFD for the development of Tanahun Hydropower Project, the second reservoir type project after Kulekhani.

    Confirming the developments, Madhu Kumar Marasini, joint secretary at MoF said that the ministry received a letter from ADFD last week. “However, meeting for further negotiations and signing of the loan agreement has not been fixed so far,” said Marasini. “The loan agreement will be signed after a detailed discussion on the terms and conditions between the two parties.”

    The government has already received concessional loan from the Asian Development Bank (ADB), Japan International Cooperation Agency (JICA) and European Investment Bank (EIB) for development of the project that is expected to be completed by 2020.

    The government has secured a total US$ 370 million from three development partners. According to the International Economic Cooperation Coordination Division at MoF, the government has received US$ 150 million loan from ADB, US$ 150 from JICA and US$ 70 million from EIB.

    ADFD that has decided to provide loan to Nepal has not so far disclosed anything about the interest rate that it would charge on loans. “Interest rates and maturity period for loan will be negotiated later,” said Marasini.

    ADB, which is a lead funding partner of the project, has already decided to provide loan to Nepal through its board of directors´ meeting in the last week of February.
    “The project is too important to us,” said Marasini. “The government will do its best to complete the project on time.” The project based in Byas municipality of Tanahun district will be developed by Nepal Electricity Authority (NEA).

    Additionally, the government has also decided to provide loan to NEA without charging any interest. The government expects to start the construction of the project by 2014.

    Source : Republica