As Nepal’s power demand continues to rise and Nepal is meeting the rising electricity needs by way import from India, one can see some rays of hope at the far horizon as the private sector has started showing interest to reduce import.

For the first time, NIBL, Nepal’s leading commercial bank, has agreed to invest 8.65 billion rupees in a 86-MW power project. Leading the consortium of 11 commercial banks, NIBL signed an agreement of financial closure with Hydro Venture Pvt. Ltd. Sahas Energy has 100 percent share in Hydro Venture.

Dudh Koshi Hydropower Project of Solu River is the first largest project financed by Nepalese commercial banks. “This shows that Nepalese commercial banks are gradually improving their capability to invest in the bigger hydropower project,” said Jyoti Prakas Pandey, Chief Executive Officer of NIBL, signing the financial closure with the Sahas Energy. “This is the largest hydropower project financed by Nepalese commercial banks.”

Out of a total of 11.86 billion rupees in total cost, the promoter Sahas Energy will invest 3.21 as a equity and interest rate of the project. The loan is 73 percent and equity is 23. Per MW cost of the project is Rs.139.7 million.

“The project will be completed in four years and the construction will start in coming December following the completion of roads and other necessary works,” said Hem Pathak, managing director of Hydropower Company. “We are working to complete the project by 2076.

Constructed in Kagel, Panchan and Tingla Village Development Committee of Solukhumbu District, the electricity will be distributed to National grid through 132 Solu Corridor Transmission Line. The project will construct over 10 kilometers of transmission lines on its own.

If the annual report of Nepal Electricity Authority is an indication, Nepal’s power sector is facing a gloom scenario in coming days. With over 13 billion rupees loss for importing electricity from India, NEA is virtually at the stage of bankruptcy.

With the decision of the government to import more electricity from India, NEA will incur further losses. At a time when the power demand continues to increase, NEA has no other alternatives than to import more electricity from India to maintain its central Grid.

If Nepal Electricity Authority completes the transmission line in time and the project is allowed to work smoothly, Nepal will get additional 86 MW of Energy from the project. The semi storage type project is also near from the load center and generate the energy to meet the demand of picking.