The consortium led by Laxmi Bank and the project’s developer Upper Solu Hydroelectric Company (USHEC) signed a loan facility agreement on Sunday.

USHEC is an undertaking of ICTC Energy promoted by the ICTC Group. ICTC Group Managing Director Prabin Shrestha and representatives of the banks and HIDCL signed the pact on behalf of their respective institutions.

The estimated cost of the project is Rs 4.1 billion. As per the agreement, the lenders will be investing 75 percent of the project cost and its promoters will put up the rest.

The promoters the ICTC Group holds an 80 percent stake in the project and Blue Energy owns the rest.

Shashi Sagar Rajbhandari, chief executive officer of USHEC, said that the loan facility agreement was signed to conclude the financial closure for financing the project. The project is the first among the so-called super six projects to conclude the financial closure, and it is at an advanced stage of development compared to the rest, said USHEC. The project’s basic infrastructure is being built, and the construction of the main structure is scheduled to start at the beginning of 2015.

In 2009, the Department of Electricity Development had initiated the process of awarding eight projects varying in capacity from 5 MW to 40 MW, including the Solu Hydroelectric Project, to private developers through competitive bidding. After an evaluation of the bids, licences for six projects were awarded to six different developers, including this one to the ICTC Group. On November 10, 2013, USHEC and the Nepal Electricity Authority (NEA) signed a Power Purchase Agreement.

According to Rajbhandari, USHEC plans to hire a contractor by the end of 2014 and begin construction in 2015. “As per the detailed project report, we aim to complete the construction of the project by July 2018,” said Rajbhandari, adding that the project was slated to begin commercial operation by July 17, 2018. As for the transmission line, Rajbhandari said the NEA would appoint a consultant and then invite tenders in October for its construction. “The NEA has assured us that the construction of the transmission line will be completed within April 2018,” Rajbhandari said.

The NEA will build a 90-km-long of the transmission line while the project will erect a 3 km section to feed the power generated by the project into the national grid.