Kathmandu: Nepal’s largest private-sector-led hydropower project, the 341-megawatt Budhigandaki Hydropower Project, has secured funding from a consortium of 10 banks and financial institutions.
The semi-reservoir-based project, to be developed by Sahas Urja Limited as the main promoter, will be financed with a mix of equity and debt totaling Rs 70 billion (approx. US$ 526 million).
The financing deal, led by Nepal Investment Mega Bank (NIMB), includes eight commercial banks, Nepal Infrastructure Bank (NIFRA), and the Hydroelectricity Investment and Development Company Limited (HIDCL).
According to Sahas Urja Chairman Him Prasad Pathak, the company will maintain a 51 percent stake in the project, with the remaining investment coming from other institutional and individual investors.
The financing model comprises 25 percent equity and 75 percent debt, with the financial closure agreement scheduled for Thursday. NIMB will contribute Rs 10 billion, followed by Nabil Bank and Laxmi Sunrise Bank with Rs 8 billion each. Global IME Bank will invest Rs 7 billion, Machhapuchhre Bank and HIDCL will invest Rs 4 billion each, while Citizens Bank, NIFRA, and Prabhu Bank will each commit Rs 3 billion. Agriculture Development Bank will provide Rs 2.5 billion.
In total, the consortium will provide Rs 52.5 billion in loans, while the remaining Rs 17.5 billion will be raised through equity. The estimated cost per megawatt is around Rs 205.3 million.
Chairman Pathak stated that construction of access roads is already complete and compensation payments are underway. The project aims to begin construction by early 2026 and start commercial generation by late 2031, with a five-year construction window.
Sahas Urja, which already operates the 86 MW Solukhola (Dudh Koshi) project, currently the largest private hydropower project in operation, will also issue a 100 percent rights offering for Budhigandaki and capitalize further funds via bonus shares from company profits.
Budhigandaki Hydropower Project will be located in Dharche-1 and 3 and Chumnubri Rural Municipality-3 of Gorkha district. While the dam and reservoir will fall within the southern edge of the Manaslu Conservation Area, the remaining project structures will be outside the protected zone.
Nepal Electricity Authority (NEA) has already signed a Power Purchase Agreement (PPA) for the project’s output.
Under the PPA, electricity will be purchased at the following rates: Rs 10.55 per unit during the peak dry season, Rs 8.40 per unit in the normal dry season, and Rs 4.80 per unit during the wet season.
The project’s core infrastructure will be built underground, reducing vulnerability to natural disasters such as earthquakes and landslides. The design discharge of the plant is 100.27 cubic metres per second, and a 2-kilometer-long reservoir will be created, with a storage capacity of 1.76 million cubic metres of water.
Key technical features of the Budhigandaki project include: A 6.5 km headrace tunnel, six turbines each with a capacity of 60.43 MW, a gross head of 398 metres, a peaking reservoir designed to operate for 5 hours daily.
Once operational, Budhigandaki will play a pivotal role in addressing Nepal’s peak electricity demand and help reduce the nation’s reliance on energy imports. The project marks a milestone in Nepal’s private-sector-driven energy expansion.
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