Nepal has secured loan investment for the largest hydropower project built by the private sector so far. Ten banks and financial institutions will jointly invest over 5.2 billion rupees as a loan for the construction of the 341-megawatt Budhigandaki semi-reservoir hydropower project.
The project promoter company, Times Energy, said the investment is managed through a consortium model led by Nepal Investment Mega Bank (NIMB). At an event in Kathmandu on Thursday, Times Energy director Sushil Thapa and NIMB CEO Jyotiprakash Pandey signed the agreement.
The total estimated cost of the project is 7 billion rupees. Of this, 75 percent or about 5.25 billion rupees will be raised through loans, while the remaining 25 percent will come from the promoter’s equity. Sahas Urja Limited owns 51 percent of Times Energy and will cover most of the equity investment.
Loan investment breakdown
| Bank/Institution | Loan investment |
|---|---|
| Nepal Investment Mega Bank (NIMB) | Rs. 1 billion |
| Nabil Bank | Rs. 800 million |
| Laxmi Sunrise Bank | Rs. 800 million |
| Global IME Bank | Rs. 700 million |
| Machhapuchhre Bank | Rs. 400 million |
| Citizens Bank | Rs. 300 million |
| Nepal Infrastructure Bank | Rs. 300 million |
| Prabhu Bank | Rs. 300 million |
| Agriculture Development Bank | Rs. 250 million |
| Hydro Electricity and Development Company | Rs. 400 million |
About Budhigandaki hydropower project
Budhigandaki is the largest hydropower project promoted by Sahas Urja. Previously, financial arrangements were made for the 285-megawatt Upper Tamor and 216-megawatt Upper Seti hydropower projects.
Among the projects already in operation, the 86-megawatt Solukhola Dudhkoshi project is the largest built by the private sector. Sahas Urja completed Solukhola Dudhkoshi, which started operation in January 2023. NIMB also led the loan investment for that project.
NIMB CEO Pandey said that because of Sahas Urja’s past success and work style, the banks are ready to invest in the Budhigandaki project. “We had invested before and are ready to invest again because of their good leadership and experience,” he said.
The dam for the Budhigandaki project will be built in Chumnubri rural municipality-3 of Gorkha district. The power house will be in Dharche rural municipality-3. The distance between the dam and power house is about 10 kilometers. The underground power house will have a head (water drop height) of 398 meters, a 6.9-kilometer tunnel, and six turbines with a total capacity of 56.8 megawatts each. The dam will store 17.6 million cubic meters of water, allowing electricity production for up to six hours a day.
Once running, the project is expected to produce an average of 1,867.77 gigawatt hours of electricity annually. During the dry season, it will produce 320.30 gigawatt hours, 243.43 gigawatt hours in normal dry seasons, and 1,304.04 gigawatt hours in the rainy season. The project requires a design discharge of 100.25 cubic meters per second.
Times Energy will sell the electricity produced to Nepal Electricity Authority (NEA). According to the power purchase agreement, the NEA will buy electricity at 4.80 rupees per unit in the rainy season, 8.40 rupees in winter, and 10.55 rupees during peak hours. The electricity will be connected through a 45-kilometer 220 kV transmission line to the 400 kV Ratamate substation in Nuwakot, which is being built with help from the Millennium Challenge Corporation (MCC).
The company said the cost per megawatt of the project is about 205.3 million rupees. The expected return on investment is 16.99 percent. According to feasibility studies, the investment can be recovered within five and a half years. The project’s net present value is about 2.32 billion rupees.
Sahas Urja bought 51 percent of Times Energy’s shares in mid-2024. Since then, the company has received construction and production permits from the Department of Electricity Development. The goal is to start commercial production by mid-2030.
The promoter company claims that the project has low economic and physical risks. There is good road access to the site, a secure water source, proper geographical conditions, and access to transmission lines. These factors will help complete the project on time.
The chairman of Times Energy, Himal Prasad Pathak, said it is a proud moment to raise investment for such a large private-sector project. “We are building one of the largest projects that is already running or under construction by the private sector,” he said.
Deputy Prime Minister and Finance Minister Bishnu Paudel said this project is a strong answer to those who doubt the private sector’s ability in Nepal. Based on past experience, he expects the Budhigandaki project to be finished on time.
Energy, Water Resources and Irrigation Minister Deepak Khadka said the increasing capacity of the private sector to develop such projects is a good sign. He also expects the project to be completed on time and the investment to be recovered within five years.
Senior Deputy CEO of NIMB, Mahesh Dhakal, said it is a proud moment to invest in the largest hydropower project promoted by the private sector in Nepal.
