The run-of-the-river project with a capacity of 25 MW lies in Phaleni and Dhodeni VDCs of Lamjung district. The consortium has approved the loan, which matures in 12 years, at an interest of 12 percent per annum.

Of the total credit amount, NIBL will provide Rs 900 million and Nepal Bank will provide Rs 520 million, said Rajendra Osti, director of Liberty Energy Hydropower, a promoter of the project.

The estimated cost of the project is Rs 3.49 billion. Local and Nepali entrepreneurs have pledged to put up the rest of the required capital.

The Lamjung Electricity Investment Group has committed funding Rs 60 million. Similarly, Rs 15 million has been collected from business entrepreneurs and locals of the district, said Bhesh Bahadur Poudel, chairman of the group.

The project is estimated to start generating power in three years. Procedures like conducting a detailed feasibility study and survey and obtaining a generation licence have been completed. The project has already signed a power purchase agreement with the government.

Tasks related to land acquisition will be completed by this week, and the project is estimated to go into formal construction by next month.

The project will have a 2.63-km free flow headrace tunnel which will lead to the powerhouse at Malebagar.

Its electricity generation is estimated to cost Rs 140 million per MW.  

The payback period for the project is estimated to be five years and seven months, and its internal rate of return is 17.20 percent, according to the project.