Nepal seeks $1.6B funding for West Seti hydro project from China

The government of Nepal will formally request China for US $1.6 billion in loan to construct the 750 MW West Seti Hydro Project Limited.

The development follows Chinese assurances to provide assistance should the government formally request so, government sources said.

"After estimating the financial capabilities of interested countries and firms, we have concluded that only China can build this project. In this regard, we will make a formal request to China," said a senior Nepal Finance Ministry
official.

The request will be made during the August 16 visit of a Chinese delegation led by a Communist Party official next week. Zhou Yongkan, who ranks ninth in the powerful Politburo Standing Committee.

A Chinese team led by Director General of the Chinese Ministry of Water Resources and Irrigation, Gao Bo, is already in the Capital. The team held talks with Energy Secretary Bala Nanda Poudel, Irrigation Secretary Tana
Gautam and Director General of Irrigation Department Anil Pokhrel on Wednesday. The Nepali side apprised the Chinese officials of their preparations.

On July 27, the Cabinet revoked the licence of West Seti Hydropower Limited held by Australia's Snowy Mountain Engineering Corps and decided that the Energy Ministry should develop the project itself.

The Ministry of Finance carried out a study of potential institutional lenders and zeroed in on China, according to sources. The Ministry of Energy revised the estimated current cost of the project to US $ 1.6 billion.

"It would be a government-to-government deal," a senior Energy Ministry official said. "We are in the last stages of readying the technical proposal that will be forwarded later to the Ministry of Finance."