Rs. 38.6 Arba Financial Closure Secured for 285 MW Upper Tamor Hydropower Project

Investment has been secured for the 285 MW Upper Tamor Hydropower Project, a semi-reservoir-based project set to be the largest hydropower initiative undertaken by the domestic private sector in Nepal. The financing for this project will be led by Everest Bank Limited, with contributions from Agricultural Development Bank, HIDCL, Rastriya Banijya Bank, Prabhu Bank, Laxmi Sunrise Bank, Nepal SBI Bank, and Garima Bikas Bank.

During the financial management ceremony held in Kathmandu on Thursday, Everest Bank's Chief Executive Officer Sudesh Khaling and Tamor Energy Private Limited's Chairman Pushpa Jyoti Dhungana signed the agreement.

The estimated total cost of the project, including interest during the construction period, is Rs. 55.15 Arba. Out of this, Rs. 16.55 Arba will be raised through equity, while the remaining Rs. 38.60 Arba will be financed under the leadership of Everest Bank Limited. Reflecting on the progress since the introduction of the Electricity Act by Shailaja Acharya in 1992, Chairman Dhungana noted that the company has evolved from constructing a 1 MW project to undertaking a 285 MW project within two decades.

Ganesh Karki, President of the Independent Power Producer's Association of Nepal (IPPAN), emphasized the capability of the domestic private sector to handle projects up to 500 MW. He advocated for the amendment of the Electricity Bill to allow such capacities, as current proposals restrict private-sector projects to 100 MW. "Today's ceremony has demonstrated that the domestic private sector can handle projects like the 285 MW Upper Tamor," Karki stated. "The Electricity Bill should be amended to permit private sector projects up to 500 MW."

Karki expressed gratitude to all the banks and financial institutions involved in the investment. He highlighted that hydropower projects not only produce electricity but also contribute significantly to infrastructure development, such as building thousands of kilometers of roads, schools, hospitals, and water supply systems. However, he also pointed out ongoing challenges, such as delays in customs clearance that have caused significant financial losses to project promoters. "Despite our progress, we still face obstacles," he said. "Customs delays have lasted four months, causing millions in losses due to the actions of a single official."

This investment marks a significant milestone for Nepal's hydropower sector, showcasing the potential of domestic resources and expertise in driving large-scale infrastructure projects.