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Proparco, IFC and other partners are financing a large-scale hydropower plant in Nepal

Project

Signature date
Location
Nepal
Financing tool
Loan
Financing amount (Euro)
9900000
Financing details
USD 11m loan
Customer
Nepal Water and Energy Development Company Pvt Ltd
Type of customer
Company
Country of headquarters
Nepal
Project number
PNP1002
Environmental and social ranking
A
Climate co-benefits
Project with climate co-benefits
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This information is given at the time of signature, without prejudice to any developments in the operation/project.

IFC, World Bank Group and a consortium of other donors are financing the construction of a hydropower plant via a USD 453m loan. For its first operation in Nepal, PROPARCO is contributing USD 11m to this financing under the Friendship Facility, with FMO as lead arranger.

Client presentation

The loan has been allocated to Nepal Water and Energy Development Company (NWEDC), which is mainly owned by three South Korean players in energy and construction: KOEN, Daelim and Kyeryong. 

Project description

The Upper Trishuli 1 project aims to develop, build and operate a run-of-river hydropower plant with an installed capacity of 216 MW on Trishuli River, 70 km to the north of Kathmandu. This plant, which should be completed in 2024, will generate about 1,427 GWh a year and will significantly increase the country’s installed capacity. PROPARCO has invested alongside IFC and a consortium of other lenders to provide a USD 453m loan to finance this power plant. It is one of the largest foreign direct investments in Nepal’s history.

Project impact

The expected impacts of this Upper Trishuli 1 project are as follows:

  • Support for over 92,000 jobs in Nepal’s economy, including some 160 direct jobs, 1,200 jobs related to the construction of the dam, some 41,000 jobs related to its operation and 50,000 jobs related to the additional energy input at the macroeconomic level; 15% of the direct employment is expected to be held by women; the employees should be trained in a number of areas, including the health and safety aspects during the construction of the dam.
  • Improvement in access to electricity for over 9 million people, in view of the planned installed capacity and annual generation. 
  • A direct tax contribution of the project to the Nepalese Government and contribution to domestic GDP during the lifespan of the project.