KATHMANDU, Nov 22: Manang Marsyangdi Hydropower Company Pvt. Ltd. (MMHCPL) has announced the success of achieving financial closure for the 135 MW Manang Marsyangdi Hydropower Project (MMHP) with the signing of a Loan Agreement with EXIM Bank, China on Friday.
As per the Loan Agreement, Exim Bank will provide CYN 1,242,500,000, which is equivalent to USD 175,250,000. The remaining loan has been arranged through other sources. The cost estimate of MMHP is USD 323,000,000.
Nepal's leading hydropower company Butwal Power Company (BPC) Limited has partnered with Chinese investors, including SCIG International Ltd., Xingcheng International Investment Co. Ltd., QYEC International Co. Ltd., and their joint venture, SCIG International Nepal Hydro Joint Development Investment Co. Pvt. Ltd., for joint investments in MMHCPL.
Message from Arun-3 Financial Closure
The financing modality of MMHP will have a debt-equity ratio of 80:20. In equity, BPC will have 20% and Chinese investors will have 80% shares. Further, MMHCPL plans to issue shares to local residents affected by the project under the prevailing laws, according to the company.
Sinohydro Bureau 7 Co. Ltd., China has undertaken the construction of MMHP under the Engineering, Procurement and Construction (EPC) model. The construction has been started with the plan to complete the project within the 42-months period. Further, Northwest Engineering, China has been carrying out the construction supervision of MMHP.
MMHP is a Peaking Run-of-River (PROR) project located in Chame and Nasong Rural Municipality of Manang District. The project has a gross head of 430 meters. A dam will be constructed in the Marsyangdi River at Chame Rural Municipality Ward No. 3, Koto and the powerhouse will be located in Nasong Rural Municipality Ward No. 9. The water will be diverted through a 6 km long headrace tunnel. MMHP will generate 766 GWh of energy annually.
MMHP is the first project out of three hydropower projects being developed under cascade modality by the same investors, each through separate project companies. The other two projects are 139.2 MW Lower Manang Marsyangdi Hydropower Project and the 327 MW Upper Marsyangdi-2 Hydropower Project in Manang and Lamjung districts respectively. The combined capacity of these three projects is 601MW and the total estimated project cost is USD 1.2 billion.
The MMHP said that the project has progressed and started construction despite challenges including lack of clarity in the hedging mechanism in Nepal, the COVID-19 impacts, land acquisition and tree-cutting complexities and the devastating Marsyangdi floods of 2021.
