Manang Marsyangdi Hydropower Project secures financial closure and begins construction

Manang Marsyangdi Hydropower Company Pvt. Ltd. (MMHCPL) proudly announces the financial closure and commencement of construction for the 135 MW Manang Marsyangdi Hydropower Project (MMHP). A major milestone was achieved by signing the Loan Agreement with EXIM Bank, China, on October 22, 2024. Under the agreement, EXIM Bank will provide CYN 1,242,500,000 (equivalent to USD 175,250,000), supplemented by additional financing sources, to cover the total project cost of USD 323,000,000. MMHP is jointly financed by Nepal’s Butwal Power Company Limited and Chinese investors SCIG International Ltd., Xingcheng International Investment Co. Ltd., QYEC International Co. Ltd., and their joint venture SCIG International Nepal Hydro Joint Development Investment Co. Pvt. Ltd. The project follows a debt-equity financing modality of 80:20, with 20% equity held by BPC and 80% by Chinese investors. Shares will also be issued to residents in the project vicinity as per prevailing laws.

The construction, undertaken by Sinohydro Bureau 7 Co. Ltd., China, under an EPC contract, has commenced with a planned completion timeline of 42 months. Northwest Engineering, China, supervises the construction of the project. In Chame and Nasong Rural Municipalities of Manang District, MMHP is a PROR project with a gross head of 430 meters. The project includes a dam on the Marsyangdi River at Koto, Chame Rural Municipality Ward No. 3, and a powerhouse in Nasong Rural Municipality Ward No. 9, connected by a 6 km headrace tunnel. Once operational, MMHP will generate 766 GWh of energy annually. This is the first of three cascade hydropower projects being developed by the same investors, alongside the 139.2 MW Lower Manang Marsyangdi Hydropower Project and the 327 MW Upper Marsyangdi-2 Hydropower Project, with a combined capacity of 601 MW and an estimated total cost of USD 1.2 billion.

Despite significant challenges, including COVID-19 impacts, complexities in land acquisition and tree cutting, unclear hedging mechanisms in Nepal, and the devastating 2021 Marsyangdi floods, MMHP has progressed to construction. MMHCPL appreciates government bodies, investors, local stakeholders, and others for their support and looks forward to continued cooperation.

Photo: Binod Shahi