The Government of Japan has agreed to provide more than US$157 million for Nepal's 140-MW Tanahun hydroelectric plant, as per an agreement signed earlier this week.
The loan will carry a 0.01% interest rate per annum on the loan amount withdrawn and must be repaid by in 30 years, following a 10-year grace period.
The agreement was signed by Kunio Takahashi, Ambassador of Japan to Nepal, and Shanta Raj Subedi, Secretary of the Ministry of Finance and Government of Nepal, on behalf of their respective governments in an effort to help alleviate Nepal's growing demand for energy. Currently, the country experiences severe load shedding -- particularly during peak hours, according to the Japanese embassy.
Earlier this week, HydroWorld.com reported the project's developer, the Nepal Electricity Authority (NEA), had received $30 million in financing from the Abu Dhabi Fund for Development (ADFD).
That contribution followed financing from the Asian Development Bank (ADB) and Japan International Cooperation Agency (JICA), both of which agreed to contribute $150 million each in January 2012. The European Investment Bank (EIB) is also reported to be financing $70 million.