IME Group's Middle Kaligandaki Hydropower Project secures funding from six banks led by Nabil Bank

Published On: June 22, 2024 05:00 PM NPT By: Republica | @RepublicaNepal

KATHMANDU, June 22: IME Group's subsidiary, Hydro Support Pvt Ltd, has successfully raised investment for the Middle Kaligandaki Hydropower Project, slated for development in Annapurna Rural Municipality of Myagdi District. To oversee the financial management of this 66.3-megawatt capacity project on the Kaligandaki River, a consortium of banks and the promoter company has entered into a loan agreement.

The agreement was signed by IME Group Chairman Chandra Prasad Dhakal, representing Hydro Support Pvt Ltd, and Gyanendra Dhungana, CEO of Nabil Bank, which leads the consortium of co-financing banks. Apart from Nabil Bank Limited, the co-financing banks include Everest Bank Limited, Nepal Investment Mega Bank Limited, Nepal Bank Limited, Rastriya Banijya Bank, and Prabhu Bank Limited.

The estimated cost of the project, excluding interest during the construction period, is Rs 12.93 billion. Seventy-five percent of this amount has been raised through loans, while the remaining 25 percent comes from equity, invested by IME Group and the general public.

The consortium of banks will collectively invest Rs 11.12 billion in the project, including interest during the construction period. Nabil Bank's share amounts to Rs 3.12 billion, Everest Bank and Nepal Investment Mega Bank will contribute Rs 2 billion each, and Nepal Bank, Rastriya Banijya Bank, and Prabhu Bank will invest Rs 1 billion each.

Construction of the Middle Kaligandaki Hydropower Project is scheduled to be completed within four years, starting in 2024. The project has secured an electricity purchase agreement with the Nepal Electricity Authority, with winter and rainy season rates set at Rs 8.40 and Rs 4.80 per unit, respectively.

It is projected that the project will generate revenue of Rs 1.9 billion from 130 gigawatt-hours during the winter season, and Rs 1.33 billion from 277 gigawatt-hours in the rainy season, totaling Rs 2.42 billion annually from 407 gigawatt-hours of electricity generated. Currently, preparatory work for the project is underway.