Of the total amount, $120 million will be utilized for the implementation of Upper Trishuli Hydropower Project A and the remaining loan will be used in other projects, the Ministry of Finance (MoF) said. However, an MoF official said the remaining amount will be used to upgrade the Pokhara Airport into a regional airport.
A memorandum of understanding (MoU) to this effect was signed on Wednesday by the visiting President of the EXIM Bank, Li Jun, and Finance Secretary Rameshore Prasad Khanal.
A press release issued by the ministry said the interest rate of the loan will be 1.75 percent and the repayment period, repayment schedules and other details will be finalized at the time of formal negotiation with China and the Bank soon. The assistance will cover civil works, electro-mechanical and transmission line of the project.
Nepal Electricity Authority (NEA) was in the process of finalizing contracting arrangements for the project for the last two years and now has come to the final stage of selecting Chinese contractor to implement the project. It was also agreed that the Ministry of Energy and NEA will formally inform the MoF the name of the contractor and the contract amount by November 8. The Bank will evaluate the project at the earliest possible and the governments of the two countries will start formal negotiations before entering into a framework agreement, the release said, adding, NEA and the China EXIM Bank will then conclude contract agreement and start implementation.
On the occasion, finance secretary appreciated the bank for its assistance and also for its continued interest to support other projects in Nepal.
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