$200m Chinese loan for hydro power plant in Nepal
In the first such big assistance to Nepal, the Export-Import (EXIM) Bank of China has agreed to extend a concessional loan worth $200 million (approx. Rs 14.97 billion) to Nepal for the development of hydropower plants.
About $120 million of the total loan amount will be utilized for the implementation of Upper Trishuli Hydropower Project and the remaining loan will be used in other projects.
Officials at Ministry of Finance (MoF) said the government is mulling to use $ 80 million amount to upgrade the Pokhara Airport into a regional airport. Pokhara is a famous tourist city in Nepal.
The visiting President of the EXIM Bank, Li Jun, and Finance Secretary Rameshore Prasad Khanal signed a memorandum to this effect on Wednesday.
The interest rate of the loan will be 1.75 percent and the repayment period, repayment schedules and other details will be finalized at the time of formal negotiation with China and the Bank soon. The assistance will cover civil works, electro-mechanical and transmission line of the project.
Nepal Electricity Authority (NEA) was in the process of finalizing contracting arrangements for the project for the last two years and now has come to the final stage of selecting Chinese contractor to implement the project. It was also agreed that the Ministry of Energy and NEA will formally inform the MoF the name of the contractor and the contract amount by November 8.
The Bank will evaluate the project at the earliest possible and the governments of the two countries will start formal negotiations before entering into a framework agreement, said a press release issuing by the Ministry of Foreign Affairs.
- Asian Tribune -