Nalsing Gadh hydro project likely to secure int’l financingNalgad Hydropower Company, the subsidiary of state-owned Vidhyut Utpadan Company and the developer of much talked about Nalsing Gadh Hydropower Project is likely to secure international financing for the development of the 410MW reservoir type project.
Nalgad Hydropower Company, the subsidiary of state-owned Vidhyut Utpadan Company and the developer of much talked about Nalsing Gadh Hydropower Project is likely to secure international financing for the development of the 410MW reservoir type project.
The company management is in talks with Japan International Corporation Agency (Jica) which has shown interest in financing the storage project in mid-western Nepal.
The Japanese state-owned agency has proposed to provide loan assistance of $500 million for the construction of the project although official decision has not been made on that regard, according to the company.
As per the discussion between Jica and the company, the financial assistance will be a soft loan with interest rate of 0.1 percent.
It has also proposed to arrange additional funds required for the project development via commercial financing.
“As per Jica’s proposal, some of the infrastructure of the project like access road, transmission line and dam will be built using the soft loan while hydro and electromechanical works will be executed with the commercial loan,” said Narendra Singh Bhandari, CEO of the company who claimed that further details about the financing of the project will be made public only after an official agreement with Jica.
Currently, the detailed project report (DPR) of the storage is being prepared by SMEC MWH Uday, the consultant appointed by the company.
It is scheduled to submit the DPR by May 2019. But, the consultant has promised to provide updated feasibility report of the project by the end of August, according to Bhandari. The company is planning to start construction as soon as it gets the updated feasibility report of the project.
The 410 MW project in Jajarkot district had been identified as one of the potential storage-type hydropower projects by the Identification and Feasibility Study of Storage Projects conducted in 1999-2001. But the project was delayed after the government decided to scrap Nalsing Gadh Development Committee and build the project under company model in April. The likelihood of the project commencing— which had been been stuck in limbo after being mired in delays — is high, with Jica showing interest in financing the project.
Nalsing Gadh is important as it can produce electricity round the year. Other attractive factors for the project include the low number of households needing to be displaced, stable river flow, less land acquisition and deforestation. Tasks like construction of vital infra around the reservoir and embankment have already been concluded. The Rs100-billion project will displace 588 households and acquire 300 hectares of cultivable land and 300 hectares of forest area.