Leading Nepal-based renewable energy solutions provider, Hydro Village Private Limited, secures the financing of $66 million for the Myagdi Khola Hydropower Project (MKHP)
The team at Hydro Village Private Limited led by the forward-thinking Sushil Pokharel, recently took a giant step towards promoting renewable energy in Nepal as the company signed a Syndicated Credit Facilities Agreement (SCFA) with a consortium of five different financial institutions. The move will facilitate the implementation of the 57.3 MW Myagdi Khola Hydropower Project (MKHP) in the Myagdi district of Western Nepal earlier this week.
Speaking at the agreement signing ceremony, Sushil Pokharel, Managing Director of Hydro Village Private Limited said the project is unique in various ways and could also be a “model project” in terms of sustainability in Nepal. “We are closely following international guidelines and have conducted a rigorous assessment of impacts on river ecosystems and people,” he said. Pokharel further stated that developers are keen on bringing visible change to the lives of the local community.
Renewable energy has become one of the biggest topics across the globe and as the government of Nepal prioritizes enhancing the domestic electricity market, it has become imperative to look for sustainable energy solutions. Studies have revealed that the present per capita consumption of Nepali consumers, which stands at less than 400 kWh/capita, is among the lowest in South Asia. The total installed capacity in the country is 2200 MW, against a huge potential of over 43,000 MW of commercially viable hydropower potential. Consequently, as Nepal aims to transition from Least Developed Country (LDC) to a middle-income country status by 2030, where the domestic electricity demand will be over 6000 MW, it is important to enhance energy production in the country.
Concerning the SCFA, Nepal Bank Ltd. will lead the consortium comprising Mega Bank Ltd, Agriculture Development Bank Ltd, Employees Provident Fund, and Nepal SBI Bank Ltd. The total amount of the loan is $66 million, with the project estimated to cost around US$88 million and generate 335 GWh of electricity per annum.
The project site is currently disconnected from the national grid of electricity and has no road access. It will be a source of direct employment for the locals and ultimately uplift the lives of the local community by ensuring access to roads, electricity, education, health facilities, and a host of others.
Bhanu Pokharel, Managing Director of Urja Developers Pvt. Ltd., strategic partner in the MKHP stated that Urja Developers will play an instrumental role in the implementation of the project and has proven track records in managing such hydropower projects. “We are committed to the sustainable development of clean energy and have been advancing towards adopting international best practices with support from International Finance Corporation (IFC),” he said.
Anil Kumar Upadhyay, president of Nepal Bankers’ Association said, “We prioritize investing in the projects that contribute to the national economy.” He further appreciated the promoters of the project for keeping the local and environmental aspects at the center of the project.
Urja Developers, the government-owned Hydroelectricity Investment and Development Company Limited (HIDCL), Singapore-based investment firm Aqua Ventures, Bizbell and Simrik Ventures will invest $22 million in equity funds for the development of MKHP.
The project construction is expected to be completed by the end of 2025 and will create direct employment for more than 1,500 people during the construction.
To learn more about the Myagdi Khola Hydropower Project (MKHP) and other initiatives by Hydro Village Private Limited, visit – www.hydrovil.com