Banks, Hydropower Firm Ink Deal

Ankhukhola Hydropower Company has signed an agreement with six banks and financial institutions that will see Rs 700 million lent to the hydel project that aims to start electricity generation by June 2010.

Prime Commercial Bank, Machhapuchchhre Bank, Sunrise Bank and Kist Bank led by Prime Commercial Bank; Kasthamandap Development Bank and Standard Finance signed the agreement to lend to the seven megawatt (MW) Ankhukhola Hydropower Project that has already finished 30 per cent of its preliminary work.

The project estimated to cost around Rs 1006 million will get Rs 230 million from Prime Commercial Bank, Rs 170 million from Machhapuchchhre Bank, Rs 100 million each from Sunrise Bank and Kist Bank, and Rs 50 million each from Kasthamandap Development Bank and Standard Finance. Project promoters will bear 30 per cent of the total estimated cost.

Consortium leader Prime Commercial Bank has lent Rs 270 million to Mai Khola Hydropower also as it is one of the most lucrative investments.

A consortium of eight banks and financial institutions -- led by Citizens' Bank International -- has lent money to the 10 MW Lower Modi hydel project.

"Ankhukhola hydel project has 15.66 per cent internal rate of returns," Bishwonath Kadel, executive director of the hydel company, said adding that the payback period of the project is estimated at six years and two months.

D B Bamjan, chairman of the hydropower company, that has a 7 MW installed capacity said that the company has already done Power Purchase Agreement (PPA) on June 4, 2009 after it got the survey licence on July 31, 2008.

Ankhu Khola is located in Dhading. According to the PPA, NEA will buy the electricity generated at Rs 7 per unit in dry season and Rs 4 per unit in wet season.