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World Bank Group approves financing for Nepal's Kabeli-A hydroelectric plant

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The World Bank Group has approved US$84.6 million in financing that will be used to fund Nepal's 37.6-MW Kabeli-A hydroelectric plant.

The run-of-river project, to be located in the eastern Panchtar district, is intended to address the country's energy shortage and help spur economic growth.

"Reliable electricity is central to any modern economic infrastructure," World Bank Country Director for Nepal Johannes Zutt said. "No country has achieved middle-income status without ensuring access to reliable, sustainable and affordable modern energy."

The bank said Nepal currently suffers up to 18 hours of blackouts per day and has less than 1% of its hydroelectric power potential developed.

Included in the financing are a $40 million credit and $6 million grant from the International Development Association (IDA), a $19.3 million loan from the International Finance Corporation (IFC), and a $19.3 million loan from the Canada Climate Change Program (CCCP).

"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," Zutt said.

Kabeli-A will be developed in three stages, according to the World Bank.

Kabeli Energy Ltd. will first build plant infrastructure including a diversion dam, settling basin, headrace tunnel, semi-underground powerhouse and tailrace. Nepal's Ministry of Energy will then supervise the project's technical, environmental and social compliancy, after which the Investment Board of Nepal will continue improving conditions for future hydropower growth.

HydroWorld.com reported in March that the IFC had pledged $6 billion to help develop as much as 3,000 MW of new hydroelectric capacity in Nepal.

For more news from Asia, visit here.

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