The loan investment for the construction of the 14.15 MW capacity Lower Erkhuwa hydropower project has been finalized. Nepal SBI and Jyoti Vikas Bank, led by Machhapuchhre Bank Limited, have committed to invest Rs 1.72 billion.
The investment agreement was signed on Tuesday by the company’s chairman Kumar Pandey and Machhapuchhre Bank’s infrastructure investment chief Binit Chandra Jha.
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. National Hydro Power Company Limited is the main investor in equity. Pandey said that the power purchase agreement (PPA) of the project is in the provision of take or pay for 13 MW.
The project, which aims to generate electricity 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 company plans to issue ordinary shares worth Rs. 150 million to the public within the fiscal year 2078/79.
Currently, construction of access road, land acquisition and other works are underway at the project site. Of the 2,500 meters of tunnel to be constructed to bring water from the dam to the power house, 810 meters have been dug so far.
The power house generated from the project, estimated to cost Rs. 2.41 billion, will be connected to the Electricity Authority’s Sheetalpati substation.
Based on the total cost, the project is estimated to be completed at a cost of Rs 18.50 crore per MW. According to the company, the target is to repay the loan taken from the banks within 12 years of generating electricity from the project.