The European Investment Bank (EIB) has agreed to a US$72.3 million loan to the Federal Democratic Republic of Nepal that will help finance the 140-MW Tanahun hydroelectric project.
The contract, signed by EIB Vice President Magdalena Alvarez and Nepalese Finance Secretary Shanta Raj Subedi earlier this week, adds to financing already being offered by the Asian Development Bank (ADB), Japan International Cooperation Agency (JICA) and Abu Dhabi Fund for Development.
The run-of-river hydropower project will be built on Nepal's Seti River and could be generating power by 2020, assuming its operator, Nepal Electricity Authority (NEA), can begin construction in 2014 as proposed.
"Since energy is the key to speeding up social and economic development, the present EIB loan will contribute to help Nepal achieve its development goals in the next couple of years," European Union ambassador Dr. Alexander Spachis said.
The project will help Nepal meet peak electrical demand during Nepal's dry winter season while operating as a base load power plant through the remainder of the year, EIB said. The plant is also part of a community development project that will supply power to 17 villages near the Tanahun.
EIB's loan "will eventually provide clean power to the country allowing households to enjoy electrical light, children to read after dark, hospitals and schools to function and entrepreneurs to invest and create jobs," Alvarez said.
HydroWorld.com reported earlier this week that several other Nepalese hydropower projects are also being considered for financing.