Five Indian banks namely State Bank of India (SBI), Export-Import Bank of India (EXIM), Punjab National Bank (PNB), Canara Bank, Union Bank of India and two Nepalese banks; Everest Bank and Nabil Bank pledged the amount in the form of structured debt. The total debt tied up with the banks is 78.60 billion Nepali Rupees (690.97 million U.S. dollars) plus 22.74 billion Nepali Rupees (199.90 million U.S. dollar) as stand-by line of credit, if required.
Five Indian banks will lend 85.98 billion Nepali Rupees (755.84 million U.S. dollars) and two Nepalese banks will lend 15.36 billion Nepali Rupees (135.02 million U.S. dollars) to the project with 8.35 percent and 8.80 percent interest rate, respectively.
Nand Lal Sharma, chairman of SJVN on Thursday said with the involvement of Nepalese banks in the project they will get the sense of belonging and will have first-hand experience that will be useful for similar projects in the future. The run-of-the-river type project in Arun River, Sankhusabha district of Province 1 has completed 25 percent construction work.
The project is being built with 70 percent funding from banks and 30 percent direct equity from SJVN Limited, an Indian company awarded with the contract for the construction of the project.
"Had the project constructed 25 years ago would prevent load shedding in the country but the capacity would be limited to 400 MW," Yubaraj Khatiwada, Minister of Finance addressing the financial closure program, said. "But now the construction is happening now, the capacity has increased to 900 MW."
Stating the huge size of the project, Minister for Energy, Water Resources and Irrigation, Barshaman Pun said it was a milestone for hydropower projects of Nepal.
Nepal government is expected to enjoy a lifetime financial benefit worth Rs 338.66 billion in the form of royalty, energy and income taxes from the project.
The company will operate the project for 25 years and hand it over to the government of Nepal after that.
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