Saturday, September 23, 2017

Chinese bank renews loan grace period of Upper Trishuli 3A

The state-owned bank of China has renewed the loan grace period for Upper Trishuli 3A by four-and-a-half year.
Writing a letter to Finance Ministry, the Export-Import (Exim) Bank of China has informed about extension of the the grace period of the loan provided to Upper Trishuli 3A Hydroelectric Project.
The renewal of the grace period, which had expired more than a year ago, implies the country can start repaying the due credit from 2021, according to the Finance Ministry.
Nepal Electricity Authority (NEA) – that is constructing the 60-MW project in Rasuwa and Nuwakot districts through a subsidiary company – had previously asked the Exim Bank of China to extend the loan grace period by five years, after expiry of the grace period in August 2016. The NEA had sought extension after the hydroelectric project was hit by devastating earthquakes in 2015, which completed halted construction works.
The Chinese bank, in 2011, had extended a concessional loan of $114.7 million at an annual interest rate of 1.75 per cent for 25 years, with a grace period of five years. As the grace period of the loan expired in August 2016, the bank wrote to the Finance Ministry and NEA requesting commencement in payment of instalment on a timely basis.
Responding to the bank, the ministry asked for an extension of the grace period stating the construction of the project had been stalled by natural disasters. The Chinese bank finally made the decision to extend the grace period a year after the Finance Ministry made the formal request.
The project contractor China Gezhouba Group Company (CGGC) has recently resumed construction works at the project site. The project has achieved an important milestone as it has completed excavation of 4.1-km headrace tunnel – on Thursday – which marks around 85 per cent of the project’s civil work completion. "We are on track to meet the April 2019 project completion deadline,” NEA appointed site in-charge of the project Ambikesh Jha said, adding that the contractor will now concentrate on construction of the project’s powerhouse.

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