Govt to finalize ToR for soft loan from EIB

KATHMANDU, Feb 11, 2013

The government is holding negotiations with the European Investment Bank (EIB) next week to finalize terms and conditions for soft loan of US$ 70 million for the construction of 140 mega watts Tanahun Hydropower Project.

“A team from EIB is scheduled to visit Nepal next week to finalize the terms and conditions for the soft loan,” joint secretary at the Ministry of Finance (MoF) Madhu Marasini, who also heads the International Economic Cooperation Coordination Division (IECCD), told Republica.

The government has already arranged a total of US$ 300 million soft loan from Asian Development Bank (ADB) and Japan International Cooperation Agency (JICA) for development of the project. “We will seek an additional US$ 70 million from EIB in the meeting scheduled for next week," Marasini said.
The government has already finalized terms and conditions for the soft loan with ADB and JICA. “The terms and conditions with EIB will be different from that of ADB and JICA,” said an official at the Ministry of Energy (MoE).

ADB has agreed to provide soft loan at 1.5 percent interest with 30 years of maturity period. Similarly, JICA has agreed to provide soft loan at 0.01 percent interest with 40 years of maturity period.

“The meeting with EIB team next week will dwell on finalizing interest rate and maturity period,” the official said. The second reservoir type hydropower project after Kulekhani will be developed by Nepal Electricity Authority (NEA) after the government arranges fund for the project.

Meanwhile, the government is also vying for a loan of US$ 30 million from Abu Dhabi Fund for Development (ADFD) for the development of the project. “ADFD has expressed interest in funding the Tanahun Hydropower Project. But any meeting with DFD has not been fixed so far,” said the official.

ADB, which is a lead funding partner, had provided US$ 25 million in grant assistance to prepare the detailed report (DPR) of the project. “The project design has been completed,” said project Chief Mahesh Prasad Acharya.

If everything goes as planned, the national pride project based in Bayas municipality of the Tanahu will start generating power by 2020. According to officials engaged in the negotiation process, ADB and JICA both also have taken Tanahun Hydro as a “prestige project”

Source: Republica

European Investment Bank, Govt sign pack for Investmet

KATHMANDU, May 8, 2012

The government and European Investment Bank (EIB) -- the European Union´s long-term financing institution -- on Monday signed a Framework Agreement, under which the bank would start financing capital investments in Nepal.
Finance Secretary Krishna Hari Baskota and the EIB Vice-President with special responsibility for Asia, Magdalena Álvarez Arza signed the agreement on Monday.

"This is a very significant moment. I am confident this first milestone in the cooperation between Nepal and the EIB will soon result into the implementation of projects, especially in the area of renewable energy and energy infrastructure,” said Arza at the signing ceremony.
With the agreement, Arza said EIB can help Nepal develop further its hydropower potential and improve economic prosperity and quality of life for the Nepalis.

Dr Alexander Spachis, Ambassador, Head of the European Union Delegation to Nepal, stated that the agreement has opened up additional avenues for the government to acquire funds for further pursuing development initiatives on important social, economic and development sectors.

“The agreement is in line with the EU´s recent initiatives designed to assist developing countries in achieving inclusive economic growth, including providing access to sustainable energy to their populations,” he stated.

The EIB finances projects in countries which have concluded cooperation agreements with the European Union. In Asia, the Bank has so far signed Framework Agreements with Bangladesh, China, India, Indonesia, Laos, the Maldives, Mongolia, Pakistan, the Philippines, Sri Lanka, Thailand, Vietnam and Yemen.

Following the signing of the agreement, the EIB vice-president also called on Prime Minister Dr Baburam Bhattarai at his office and discussed the future role of the EIB in supporting Nepal´s sustainable development, reads a press statement of EIB.

Source: Republica