During Covid, banks increased investment in hydropower

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The developers have invested billions of rupees in equity. After the developers have invested half of their own capital, the contracted banks start the flow of credit.

The installed capacity of the project invested by the banks is 251 MW. The projects with investment agreement include 48.50 MW Rahughat Khola, 21 MW Upper Khudi, 4.95 MW Upper Piluwa Khola-3 Lower, 14 MW Lower Irkhuwakhola, 160 MW Lapchikhola and 25 MW Seti River projects.

In these projects, Kumari Bank, Global IME Bank, Siddhartha Bank, Nepal Credit and Commerce (NCC) Bank and Machhapuchhre Bank, Nepal Bank, Nepal SBI Bank, NMB Bank, Bank of Kathmandu, Krishi Vikas Bank and Employees Provident Fund will also invest in co-financing. Have been

Banks are eager to invest after the Nepal Rastra Bank made it compulsory to invest 10 percent of the total loan in hydropower by 2081 BS. Accordingly, 6 percent of the total loan should be invested in hydropower by 2078 BS. Similarly, the investment will have to be increased at the rate of 1 percent per annum to 10 percent by 2081 BS. After setting the investment limit, credit flow has been increased in financially and technically feasible projects.

Similarly, development banks have to invest 20 percent in hydropower, home and small scale industries and tourism and finance companies have to invest 15 percent.
On Tuesday, Tundi Power Company Private Limited has taken a loan of Rs 5.81 billion from banks to build the 48.50 MW Rahughat Khola Hydropower Project. An agreement has been reached to invest in this project under the leadership of Kumari Bank.

The project is estimated to cost Rs. 8.30 billion. In addition to Kumari, Global IME Bank, Siddhartha Bank, NCC Bank and Machhapuchhre Bank will invest in the project.

Similarly, the Chinese company Sichuan Ji Antai Energy Development Limited will be the foreign investor. The project aims to generate electricity by 2080 BS.

Similarly, five commercial banks have signed loan agreements worth Rs 4.19 billion for the construction of 21 MW Upper Excavated Hydropower Project on Monday. The loan will be invested in the project under the leadership of Bank of Kathmandu (BOK).

BOK is co-financed by Global IME Bank, Civil Bank, Mega Bank and NCC Bank. The project will have 70 percent bank loan and the remaining 30 percent equity investment.

On Monday, two banks have signed loan agreements for the Upper Piluwa Khola-3 Hydropower Project to be constructed by Mabilung Energy Limited. Led by Laxmi Bank, Machhapuchhre is to invest Rs 650 million under project co-financing.

Laxmi Bank and Machhapuchhre Bank have agreed to invest Rs 399.9 million and Rs 256 million respectively in the project.
The installed capacity of the project in Sankhuwasabha district is 4.95 MW. The construction cost of the project is estimated at Rs. 937 million.

Banks will have 70 percent of the project cost and the remaining 30 percent will be the company’s own capital investment. The feasibility study has shown that the project will generate 284.17 million units of electricity. The project will be completed in February 2022, according to the developer.

Three banks have signed investment agreements for the construction of the lower Irkhuwakhola Hydropower Project in Bhojpur. Nepal SBI and Jyoti Vikas Bank, led by Machhapuchhre Bank, have committed to invest Rs 1.72 billion in the 14.15 MW capacity hydropower project.

The project will have a loan of Rs 1.72 billion from three banks and a capital investment of Rs 710 million from the promoters. The project will be mainly owned by National Hydropower Company Limited. The project, which is targeted to be completed by 2079 BS, will generate 75.1 million units of electricity annually. It is projected to generate an annual income of Rs. 430 million. The project is estimated to cost Rs 2.41 billion.

Similarly, Vision Lumbini Energy Company Limited has invested in the 25 MW Seti River Hydropower Project. Under the leadership of NMB Bank, three banks and financial institutions have signed loan investment agreements worth Rs 3.5 billion. The NMB will invest Rs 2.20 billion, the Employees Provident Fund Rs 800 million and the Agriculture Development Bank Rs 500 million in the project.

Vision Lumbini is constructing from Seti River Hydropower Project in Machhapuchhre village of Kaski.Lapche hydropower being built by business house Dugad

Investment has been raised for the construction of 160 MW Lapche Hydropower Project. The Lapche Hydropower Project, the main investment of the prestigious business house MV Dugad Group, is being constructed by Nasha Hydropower Pvt. The project is estimated to cost Rs. 26.20 billion.

Under the leadership of Nepal Bank, 9 different banks and financial institutions have mobilized financial resources. Banks and financial institutions have agreed to invest Rs. 19.65 billion.

Nepal Bank has contributed Rs 5 billion, Nepal Investment Bank Rs 3.5 billion, Employees Provident Fund Rs 2 billion, Rastriya Banijya Bank Rs 2 billion, Himalayan Bank Rs 2 billion, Laxmi Bank Rs 1.88 billion, Nepal SBI Bank Rs 1 billion and Bank of Kathmandu Rs 1 billion. Billion and the Agriculture Development Bank is to invest Rs. 1 billion in loans

 

Source : Captial Nepal / Traslated