World Bank okays $84.6m for Kabeli-A hydel project

- POST REPORT, Kathmandu

May 16, 2014-

The World Bank Group on Friday approved financing worth $ 84.6 million for the Kabeli-A Hydroelectric Project. The funding package includes a $ 40 million loan and a $ 6 million grant from the International Development Association (IDA) besides a $ 19.3 million loan from International Finance Corporation (IFC). Additionally, the package includes a $ 19.3 million loan from the Canada Climate Change Program (CCCP) for which the IFC acts as the implementing agency.

Kabeli-A is a run-of-river project in Panchthar district with an installed capacity of 37.6 MW. The energy output will be connected to the national grid via the Kabeli Corridor Transmission Line, a separate project under construction with World Bank financing.

Kabeli-A was among the projects short listed in the late 1990s on the basis of a screening and ranking exercise. Following an international competitive bidding process in 2007, the government offered the contract on build, own, operate and transfer (BOOT) model to Kabeli Energy Ltd. The company will invest $ 23 million towards the $ 108.6 million cost of the project. This World Bank-IFC project will demonstrate how public-private partnerships can help Nepal exploit its hydropower potential and eliminate electricity deficits while also developing hydroelectricity exports as an engine of the nation’s economic growth,” said Johannes Zutt, World Bank Country Director for Nepal.

The project has three components. Kabeli Energy Ltd will implement the first component to build plant infrastructures including a diversion dam, a settling basin, a headrace tunnel, a semi-underground powerhouse and a tailrace tunnel.

The second component will support the Ministry of Energy in supervising implementation of the project in compliance with technical, environmental and social safeguards and to improve its capacity in overseeing hydropower development.

The third component will support the Investment Board of Nepal in improving its ability to facilitate the development of large hydropower projects in line with applicable international technical, environmental, social and performance standards.

“The project design reflects the lessons learned from hydropower projects worldwide, including those in the Himalayas where similar conditions exist,” said Jie Tang, World Bank Lead Energy Specialist and Task Team Leader for the project.

Published: 17-05-2014 09:39

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