KATHMANDU: The SJVN-Arun-3 Power Development Company (SAPDC) signed a financial closure (FC) agreement with leading banks of India and Nepal on February 6, 2020. The signing of the FC deal has assured financing of the 900 MW Arun-3 Hydropower Project from the lending banks. Investment Board Nepal (IBN) has been facilitating the implementation of the Arun-3 Project.
Five Indian banks – State Bank of India (SBI), Export-Import Bank of India (EXIM), Punjab National Bank (PNB), Canara Bank, and Union Bank of Indi – and two Nepali banks – Everest Bank and Nabil Bank – closed the deal with SAPDC. The seven leading banks have pledged to issue credit worth NPR 101.34 billion to the project developer. As per the agreement, Indian banks are lending NPR 85.98 billion and Nepali banks will provide a credit of NPR 15.36 billion.
Speaking at the signing ceremony, Mr. Nand Lal Sharma, chairman of SJVN Ltd., the Indian government undertaking and parent company of SAPDC, said the FC demonstrates the trust of lending agencies toward the project. The project has achieved more than 30 percent completion in construction work. The Investment Board Nepal (IBN) had issued a generation license towards the developer company on May 3, 2018. SAPDC and IBN signed the Project Development Agreement (PDA) on November 25, 2014. Right Honorable Prime Minister Mr. K. P. Sharma Oli and his Indian counterpart Excellency Narendra Modi had jointly laid the foundation stone of the project on May 11, 2018.
Also speaking at the program, Honorable Minister for Energy, Water Resources and Irrigation Mr. Barshaman Pun said that the Arun-3 project would be a milestone in hydropower development in Nepal. Honorable Finance Minister Dr. Yubaraj Khatiwada said the FC of the Arun-3 Project reflected the improving investment climate in the country. OIBN’s CEO Mr. Maha Prasad Adhikari expressed hope that the implementation of Arun-3 Project will unleash more economic activities in the country.
43rd Board grants permission to secure FC for Arun-3
The 43rd meeting of the Investment Board Nepal (IBN) was held on February 5, 2020, under the chairmanship of Right Honorable Prime Minister Mr. K. P. Sharma Oli. The meeting decided to extend the timeline of the financial closure (FC) for the 900 MW Arun-3 Hydropower Project till March 13, 2020. The meeting also decided to grant permission to the project developer company, Arun-3 Power Development Company Private Limited (SAPDC), to sign an agreement with lending financial institutions to secure finances for the project. ♦