Nepal, Japan ink loan deal for Tanahun Hydropower Project

The Japan government on Wednesday signed a loan agreement worth US$ 184 million for the development of 140 megawatts Tanahun Hydropower project.
The loan extended through Japan International Cooperation Agency (JICA) -- an official agency of Japanese government for international development -- has 40 years of repayment period. JICA, which is a lead funding partner for the development of the Tanahun Hydropower project, has provided the loan at 0.01 percent interest rate.
The loan agreement was signed by Joint Secretary at the Ministry of Finance (MoF) Madhu Kumar Marasini and Masataka Nakahara, director general of South Asia Department of JICA. “JICA is happy to extend the loan for the development of storage type hydropower project,” Nakahara said after signing the loan agreement. “This project can be helpful in removing development bottlenecks of the country that have resulted from acute power shortage.”
The project that would be developed by Nepal Electricity Authority (NEA) has already secured a total of US$ 434 million from various development partners.
As of now, the government has successfully garnered funding from Asian Development Bank (ADB), European Investment Bank (EIB) and Abu Dhabi Fund for Development (ADFD) and JICA. According to Marasini, EIB has expressed commitment to provide a loan of US$ 70 million and ADFD US$ 30 million to Nepal for the development of the project.
The estimated cost of the project is US$ 505 million and is expected to get completed by October 2020. “I request the government of Nepal to ensure transparency and accountability while implementing the project,” Kunio Takahashi, ambassador of Japan to Nepal said at the function organized to sign the loan agreement.
ADB, which is responsible for hiring consultants for the project, has already endorsed loan for the project a couple of weeks ago. “Tanahun Hydropower is the most promising project so far in the country,” Takahashi said.
“The Japanese government is happy to be a partner in Nepal´s hydropower development endeavor.”
The Japanese government has also provided loan to develop the 60 megawatts Kulekhani Hydropower Project I, 32 megawatts Kulekhani II and 144 megawatts Kaligandaki ´A´ Hydropower Project in the past.