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Nepal: Upper Trishuli-1 Hydropower Project

SUMMARY

STATUS
Approved
MEMBER
Nepal
SECTOR
Energy
E&S CATEGORY
Category A
PROJECT NUMBER
000085

FINANCING

PROJECT TYPE
Cofinanced
APPROVED FUNDING
USD90 million
FINANCING TYPE
Nonsovereign

TIMELINE

CONCEPT REVIEW
October 26, 2018
APPRAISAL REVIEW/FINAL REVIEW
April 9, 2019
FINANCING APPROVAL
May 21, 2019

OBJECTIVE

The objectiveis to reduce the acute power shortages in Nepal by increasing power generation capacity in the country to meet its power demand.

DESCRIPTION

The Upper Trishuli-1 Hydropower project (UT-1 or the Project) is a 216 mega-watt greenfield run-of-river hydropower plant on the Upper Trishuli River in Nepal. The Project is being developed by Nepal Water and Energy Development Company Private Limited (NWEDC), the Project Company, a special purpose vehicle incorporated under the laws of Nepal.

The Project is developed under a 35-year (including five-year construction period) build, own, operate and transfer (BOOT) model. The Project Development Agreement (PDA) was signed between the Ministry of Energy, Water Resources and Irrigation and the NWEDC on Dec. 29, 2016. Under the PDA, the Sponsors will be responsible for the design, engineering, financing, construction, completion, commissioning, ownership, operation and maintenance and transfer of the Project.

The Project will sell power to the Nepal Electricity Authority (NEA), the off-taker, under a 30-year Power Purchase Agreement (PPA). The PPA was entered between the NEA and the NWEDC on Jan. 28, 2018. Under the PPA, the NEA will buy the energy generated under a take-or-pay arrangement. The power will primarily be used for domestic consumption. The tariff is based on the standard feed-in-tariff for run-of-river projects in Nepal, which has a split tariff: one for the wet (summer) season and another for the dry (winter) season.

PROJECT FINANCING

For more information about project financing, please review the project summary.

ENVIRONMENTAL AND SOCIAL INFORMATION

The UT-1 project will be co-financed with the International Finance Corporation (IFC), Asian Development Bank (ADB) and other development financial institutions and has been prepared in accordance with the IFC's Policy on Environmental and Social Sustainability (IFC Policy) and Performance Standards on Environmental and Social Sustainability (IFC PSs) (2012). AIIB is satisfied that: (i) the IFC Policy and IFC PSs are consistent with AIIB’s Articles of Agreement and are materially consistent with AIIB’s Environmental and Social Policy (ESP) and relevant Environmental and Social Standards (ESSs) and (ii) the monitoring procedures that IFC has in place are appropriate for the Project. Consequently, as permitted by the ESP, AIIB will apply the IFC Policy and IFC PSs to this Project.

PROJECT TEAM LEADER

Prakash Bajoria

Senior Investment Officer

prakash.bajoria@aiib.org

 

BORROWER

Kim Min Young

Managerial Director
Nepal Water and Energy Development Company Private Limited

min.young@nwedc.com.np

IMPLEMENTING ENTITY

N/A

PROJECT DOCUMENTS

CLIENT/COFINANCING PARTNER DOCUMENTS

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