Kathmandu: Financial closure has been secured for the 16 MW Machhakhola Hydropower Project, which is set to be developed in Dharche Rural Municipality of Gorkha district. The project promoter, Water Energy Development Pvt. Ltd., signed a loan agreement led by Agricultural Development Bank Limited with participation from Lumbini Development Bank Limited, paving the way for accelerated construction progress.
The financial management agreement was signed by the company’s Executive Chairman Krishna Prasad Acharya, Yogendra Bahadur Singh on behalf of Agricultural Development Bank, and Bhesh Raj Gautam representing participating lender Lumbini Development Bank. According to the company, construction activities will now move ahead at a faster pace following the financial closure.
The total estimated cost of the 16 MW project stands at Rs 3.66 billion. About 73.22 percent of the total investment, equivalent to Rs 2.68 billion, will be financed through bank loans. Of this amount, Agricultural Development Bank will invest Rs 1.50 billion, while Lumbini Development Bank will contribute Rs 1.18 billion. The remaining Rs 980 million will be raised through equity investment from promoters and other investors.
According to the company, the project is designed to utilize 3.40 cubic meters of water per second and will operate with a gross head of 562.50 meters. The plant is expected to generate 98.49 GWh of electricity annually. Of the total generation, 32.42 percent will be produced during the dry season and 67.58 percent during the wet season.
Based on projected electricity generation, the company estimates revenue of around Rs 587.6 million in the very first year of operation. Furthermore, under the Power Purchase Agreement (PPA) signed with the Nepal Electricity Authority, electricity tariffs will increase by three percent annually for the first eight years, which is expected to gradually raise project income over time.
The project infrastructure includes the construction of a 25-meter-long dam. Water will be diverted through a 3,383-meter-long inverted “D”-shaped tunnel measuring 3×3 meters. From the tunnel outlet, water will be conveyed through a 1,772-meter-long penstock pipe to a surface powerhouse for electricity generation.
The electricity generated will be evacuated through a 22-kilometer-long 132 kV double-circuit transmission line connected to the under-construction Borang Substation of the Nepal Electricity Authority. The power will then be supplied to the national transmission grid.
The company stated that the required infrastructure development for the project has already been completed. Tunnel excavation work began in mid-April/mid-May, and construction is being expedited through contractors experienced in the hydropower sector.
According to the company, the project includes investment from entrepreneurs experienced in hydropower investment and operation, as well as participation from local residents. The company also plans to provide share investment opportunities to the general public in the future.
Claiming that the Machhakhola Project carries strong potential for attractive returns, the company expressed confidence that construction activities will gain further momentum after the financial closure. It added that investor enthusiasm has also increased alongside the project’s progress.
Jalasarokar
