Upper Tamakoshi signs loan agreement with CIT, RBS

Upper Tamakoshi Hydropower Company Ltd today signed a Rs 4 billion long-tern loan agreement with Citizen Investment Trust (CIT) and Rastriya Beema Sansthan (RBS).
Speaking at the loan-signing cremony here today in the Valley, Mrigendra Bahadur Shrestha, project director of the hydropower company said that the interest rate of the loan will be 11 per cent. "The rates can be revised annually on mutual consent," he said, adding that the lending is for 15 years.
Though its a challenging task but the much-awaited hydro project will be completed within the time, Shrestha added.
Upper Tamakoshi Hydropower Ltd is a subsidiary company of Nepal Electricity Authority (NEA) for survey, design, construction, operation and management of 456-MW Upper Tamakoshi Hydroelectric Project including selling of generated power to the grid operator by utilising national financial and technical resources. The project -- deemed as the cheapest -- costs Rs 35.29 billion, except the interest. "Out of the total cost, Rs 24.70 will be loan and Rs 10.59 billion will be share capital making it to a 70 per cent loan and 30 per cent share capital," he said.
The three companies, CIT, RBS and Nepal Telecomm (NT) are also the promoters of the project.
Nepal Electricity Authority (NEA) -- on behalf of Upper Tamakoshi Hydropower Company Ltd -- had earlier signed an agreement with NT, CIT and RBS to share 30 per cent of the share capital of the project.
"The hydropower company will soon sign loan agreement of Rs 6 billion with NT also," Shrestha said.
According to the equity structure, NEA will have 41 per cent, NT six per cent, RBS and CIT two per cent each making it to a total of 51 per cent promoters' share. The public will have 15 per cent, locals of Dolakha district will have 10 per cent, and depositors of Employees Provident Fund, employees of Tamakoshi Hydroproject, NEA and the employees of the lending agencies will get the remaining of 24 per cent share.
"The indeginous hydropower project will help ease the load-shedding when it copmpletes in 2015," said the mega power project that is being constructed with domestic capital and technology.
“On time completion of the project is key,” RBS administrator Binod Aryal said.
According to the NEA, Tamakoshi Hydropower Project will contribute to 66 per cent of the total installed capacity of the nations power projects and 73 per cent of the total energy that NEA has currently as it will generate 2.28 billion unit of electricity annually.
The company -- registered in 2007 -- has also aimed to develop other hydropower projects in the country in future. It has already prepared a draft Power Purchasing Agreement (PPA) and is signing a formal agreement with the NEA at Rs 3.13 in rainy season and Rs 6 in dry season. "After nine years of agreement the PPA amount will be a maximum of Rs 5.30 per unit," according to the project.