SATV, Kathmandu, Aug. 19 - The financial closure of the proposed 420-megawatt Tila-2 Hydropower Project in Kalikot district has been formally completed. An investment agreement was signed in Kathmandu on Monday between the project promoter, Urja Tila Power Company Pvt. Ltd., and various banks and financial institutions.
The project has an estimated total cost of Rs. 70.07 billion. Of this, 75 per cent (Rs. 52.55 billion) will be raised as loans from various banks and financial institutions, while the remaining 25 per cent (Rs. 17.52 billion) will be financed through the promoter company's equity, according to the agreement.
According to the company, 20 per cent of the total investment would be offered as shares to project-affected local residents of Kalikot and the general public. Everest Bank Limited is the lead bank for the project, while Sanima Bank Limited is the co-lead bank.
Prime Commercial Bank, NIC Asia Bank and Global IME Bank are participating as co-lead banks. Other participating banks are Siddhartha Bank, Nabil Bank, Nepal Infrastructure Bank, Agricultural Development Bank, Muktinath Development Bank and Kamana Sewa Bikas Bank.
The semi-reservoir project, which can operate at full capacity for up to six hours a day during peak periods, is expected to become a milestone in the development of Karnali Province. The dam will be constructed in Tilagupha Municipality and the powerhouse in Khandachakra Municipality. The project aims to begin electricity generation within four years of the start of construction.
The project had obtained its electricity generation licence from the Department of Electricity Development on August 23, 2018. It also signed a power purchase agreement (PPA) with the Nepal Electricity Authority on October 23, 2024, for 296.74 MW. According to the agreement, once fully operational, the project will generate a total of 2,318.79 gigawatt-hours of electricity annually and feed it into the national grid.
Of the total generation, 451.05 GWh will be generated during the dry-season peak period, 205.45 GWh during the dry-season off-peak period and 1,662.29 GWh during the wet season. Stream Investment, Urja Impact Fund, Robbins USA and other domestic and foreign institutional and individual investors are among the project's principal promoters.
With the loan investment agreement, the most complex financial management phase of the project construction has been completed and the construction process has moved forward. Local residents have welcomed the decision to proceed with the project. Local resident Hari Bahadur Shahi said that everyone should now focus not only on demolition but also on development and construction.
Another local resident, Lal Bahadur Malla, said he was hopeful that the project would finally be constructed after the long-awaited investment from banks was secured. He said it was encouraging that a project that had been stalled after the survey was now being revived and taken forward through a new agreement after nine years.
