Sustainable Hydropower Creates Opportunities in Nepal
From a mountain-top source in Tibet, the Trishuli River gathers force as it flows through the steep valleys of the Himalayas, entering Nepal in a swollen, crashing cascade.
With over 6,000 rivers and streams, Nepal has an enormous potential for hydropower. However, energy shortages are chronic. Nepal imports both electricity and fossil fuels from its neighbors. Across its countryside, many families rely on kerosene lamps for light and firewood to cook. Two-thirds of Nepalese firms identify unreliable electricity as a major obstacle to doing business.
Now, the power of the Trishuli River will be harnessed to create a 216-megawatt run-of-river hydropower project that will increase Nepal’s domestic energy production significantly and help meet its growing demand for electricity. When completed, the Upper Trishuli-1 Hydropower Project, known as UT-1, will provide improved and sustainable electricity access to millions and create jobs. It will also set new environmental and social benchmarks for Nepalese hydropower projects that follow.
UT-1 is one of the largest foreign direct investments in Nepal to date. IFC led a $453 million debt financing package that includes nine international lenders. The project brought to bear several World Bank Group financing mechanisms. It received more than $100 million in support from the IDA Private Sector Window, an instrument that allows IFC and the Multilateral Investment Guarantee Agency (MIGA) to extend its reach into more challenging markets, while MIGA will provide $135 million in guarantees to cover political risk for the sponsors. The project is also supported by the Finland-IFC Blended Finance for Climate Program and the Climate Investment Funds. The environmental and social advisory components of the project are implemented in partnership with the governments of Australia, Japan, and Norway. Financing from the Asian Development Bank is also being supported by the Government of Canada.
News and Image Source: https://www.ifc.org/wps/wcm/connect/news_ext_content/ifc_external_corporate_site/news+and+events/news/cm-stories/nepal-sustainable-hydropower