In a significant boost to Nepal’s hydropower sector, six leading banks have committed to funding the 43 MW Upper Madi-0 Hydropower Project in Madi Rural Municipality, Kaski. The project is expected to play a crucial role in increasing energy production and meeting the growing electricity demand in the country.

The total estimated cost of the project is NPR 8.12 billion, with 70% of the funding (NPR 5.68 billion) secured through loans from the banks, while the remaining 30% will come from equity contributions by the project promoters, Annapurna Power Company. The breakdown of the loan commitments is as follows:

Citizens Bank International: NPR 1.5 billion
Global IME Bank: NPR 1.23 billion
Nepal Bank Limited: NPR 1 billion
Laxmi Sunrise Bank: NPR 850 million
Nepal SBI Bank: NPR 600 million
Machhapuchchhre Bank: NPR 500 million

The involvement of major banks demonstrates strong confidence in Nepal’s hydropower sector as a viable investment avenue. This financial collaboration is expected to ensure smooth execution and timely completion of the project.

The Upper Madi-0 Hydropower Project holds immense potential to enhance Nepal’s energy independence, especially in rural areas. Once completed, the project will contribute significantly to Nepal’s electricity grid, reducing reliance on imported electricity and fostering local economic growth.

Additionally, the project aims to be completed within four years, aligning with Nepal's broader strategy of accelerating hydropower development to support industrialization and economic growth.

The loan agreement was formalized at a signing ceremony in Kathmandu. Representing Annapurna Power Company, CEO and Senior Engineer Shriram Neupane exchanged agreements with Rajendra Lal Shrestha, Deputy CEO of Citizens Bank International, the lead financier.

The event saw participation from notable figures, including MPs Dr. Swarnim Waglé, Dr. Chandra Bhandari, Man Bahadur Gurung, and Jeevan Pariyar, highlighting the project’s national importance. High-ranking officials, including Kulman Ghising, Executive Director of Nepal Electricity Authority, and Dr. Ram Prasad Dhital, Chairperson of the Electricity Regulatory Commission, also attended.

While the project has received strong financial backing, challenges such as land acquisition, local community engagement, and potential environmental concerns must be addressed effectively. The collaboration between banks, government agencies, and project developers is critical to overcoming these hurdles.

On the positive side, the project symbolizes Nepal's growing capacity to mobilize large-scale investments in infrastructure, paving the way for future hydropower ventures. It also aligns with the government’s goals of achieving energy self-sufficiency and exporting electricity to neighboring countries.

The Upper Madi-0 Hydropower Project is more than just an infrastructure venture; it represents a step forward in Nepal's journey toward sustainable energy solutions and economic development. With six prominent banks uniting to support the project, its successful completion could set a benchmark for future public-private partnerships in Nepal’s energy sector.