Saudi Fund invites govt for loan deal

    255

    KATHMANDU, NOV 26 –

    budhi-gagkaThe Saudi Fund has asked the government to start loan negotiations for the Budhi Ganga Hydropower Project. The planned 22 MW run-of-the-river project is located in Achham district in the far west. The fund has pledged a soft loan of US$ 30 million to build it.

    Last March, the government signed a loan agreement with another Gulf country Kuwait for the project. The Kuwaiti Fund has pledged credit amounting to US$ 18 million. The project’s total estimated cost is US$ 54 million. However, the forecast is expected to go up after a detailed design is prepared. The government will put up the rest of the required money.

    Under secretary at the Finance Ministry Hari Pandey said that the Saudi Fund had sent a request to the government before the Constituent Assembly election to begin negotiations in December. “We are preparing to send a proposal to the cabinet to get approval for negotiation with the Saudi Fund,” he added.

    It is vital for Nepal to secure credit from the Saudi Fund as the promised loan from the Kuwaiti Fund is contingent upon it. The government has to pay an interest of 2 percent per annum on both these loans. The Kuwaiti Fund has previously lent money for the Kulekhani project. Meanwhile, the Budhi Ganga Hydropower Project is in the process of appointing a consultant to conduct a detailed design. “We are preparing a short list of pre-qualified consultants,” said an official of the Department of Electricity Development (DoED), the developer of the project.

    This is the first project the DoED is developing after it merged with the Nepal Electricity Authority (NEA). The DoED aims to start construction of the project after two years and complete it by 2019. Meanwhile, the NEA will carry out an environment assessment of the project along with the detailed design.

    Source :The Kathmandu Post