Govt signs $30m pact with Kuwaiti Fund for Budhi Ganga project

KATHMANDU, MAY 15 -

The government has signed an agreement with the Kuwaiti Fund for Arab Economic Development for a soft loan worth $30 million to develop the 30 MW Budhi Ganga Hydropower Project (BGHP).

Finance secretary Krishna Hari Baskota and Mohamod A Rajmi signed the accord.

Nepal had made a formal request to the Kuwaiti authorities for credit during the then Finance Minister Barsa Man Pun’s recent visit to Kuwait. The Finance Ministry received the approval letter for the loan from the Fund a week ago.

The estimated cost of the project base in western Nepal is Rs 4.40 billion. “The government will find additional resources on its own,” said Baskota. The BGHP is a run-of-the-river type, and is being constructed under the Nepal Electricity Authority (NEA).

Ministry officials said that as the country was gradually preparing an investment climate, the fund showed interest in investing in the country. “We have also asked the delegates to invest in sectors like agriculture, tourism and hydropower in collaboration with the private sector,” added Baskota.

The fund had signed an agreement with the Nepal government in 1976 for the first time. It invested some $8.5 million to build the Kulekhani Hydropower Project. It had also invested $7 million in the same project in 1979.

The fund had also agreed last year to provide financial aid worth Rs 52 million to carry out a feasibility study of the proposed Sitapaila-Dharke road. After completing an economic and feasibility study of the 25-km road link that is being seen as an alternative entry point into the Kathmandu valley, the government plans to ask Kuwait for assistance to build it, sources added.

Source: The Kathmandu Post