Money matters: MoF, NEA asked to arrange fund for Upper Trishuli 3AThe National Development Action Committee (NADC) has directed the Ministry of Finance (MoF) and the Nepal Electricity Authority (NEA) to arrange additional fund required for the Upper Trishuli 3A Hydropower Project which is being developed under the soft loan from the Export-Import (Exim) Bank of China.
The National Development Action Committee (NADC) has directed the Ministry of Finance (MoF) and the Nepal Electricity Authority (NEA) to arrange additional fund required for the Upper Trishuli 3A Hydropower Project which is being developed under the soft loan from the Export-Import (Exim) Bank of China.
After the Exim Bank refused to extend additional loan amount required to pay the consultant due to delay in construction of the project, the 40th NADC meeting, presided over by Prime Minister Sher Bahadur Deuba, directed the authorities to arrange the fund. The meeting was held last month.
Recently, the Chinese bank extended a grace period of four and a half years for the repayment of loans granted to Nepal to construct the 60MW project after the NEA via the MoF called for the same.
The grace period for repaying the loan expired in August last year after the project was also hit by the devastating earthquake in April 2015. During the grace period, the borrower need not start the loan repayment process.
“However, the bank refused to release additional fund required to pay the consultant due to delay in the construction as requested by the Nepal government,” said Arbind Kumar Mishra, member of the National Planning Commission (NPC) as well as NADC. “Therefore, the NADC meeting, at the initiative of the NPC, directed the MoF and the NEA to arrange domestic fund so that the project development can continue uninterrupted.”
The Chinese bank, in 2011, had extended a concessional loan of $114.7 million at an annual interest rate of 1.75 percent for 25 years, with a grace period of five years. As the grace period of the loan expired in August 2016, the bank had written to the MoF and the NEA requesting commencement in payment of installment on a timely basis.
In response, the ministry asked for an extension of grace period, stating that the construction of the project had been stalled by natural disasters. The Chinese bank finally made the decision to extend the grace period a year after the MoF’s formal request.
Recently, China Gezhouba Group Company (CGGC), the contractor for the project, resumed construction works which were halted after the devastating earthquake in April 2015. In the last week of September, the project achieved an important milestone, completing the excavation of 4.067km long headrace tunnel.
Currently, a technical team of the Nepal Army is carrying out repair works at the landslide-affected areas near the place where the dam of the project is being built. The earthquake-triggered landslides had affected areas close to the dam site, raising concerns about workers’ safety.
The army team has almost completed shotcreting the hill that lies on the right-side of the dam. Shotcreting is a process of spraying concrete throughout the surface of hills to avert landslides. In order to prevent landslides, the army is also building fences with a special type of wire. Lately, the army has also repaired various sections of the access road damaged by earthquakes.