Brussels, 13/05/2013 (Agence Europe) - Last week, the European Investment Bank (EIB) granted a €55 million (NPR approx 6.41 billion) loan to the Federal Democratic Republic of Nepal to finance the construction and operation of the Tanahu Hydropower plant, which will have a storage capacity of 140 MW, and its connection to the national grid. The plant will help Nepal meet peak electricity demand during the dry winter season when the shortages are more acute and will operate as a base load power plant during the remaining period of the year. In a press release, the EIB explained that the project would help replace an expensive mode of production based on fossil fuels with a cleaner kind of energy and help stabilise the national electricity supply network as well as reduce travel costs. The EIB also said that the project would help supply Nepal with renewable and sustainable electricity and help to avoid producing additional thermal energy (based on diesel), which generates high CO2 emissions, as well as other dangerous environmental pollutants. This renewable energy will help supply the electricity grid, which suffers from serious production deficits and subsequent costly losses that have a damaging impact on the local economy. In this respect, the project complies with the EIB's external lending mandate because it promotes economic development and sustainable energy production at an environmental level. Its funding also responds to the EIB's energy sector lending objectives on renewable energy and adapting to climate change.
The total cost of the project will be around €390 million. (OL/transl.fl)