Nepal seeks $400 million soft loan from China to fund transmission line project
The government has requested a soft loan of $400 million from China for the construction of transmission lines.
According to the Investment Board of Nepal, the loan will be used for the construction of transmission lines of 750 MW West Seti Hydropower Project that a Chinese firm is constructing in western Nepal.
The Chinese government is keen on funding the hydropower project and transmission lines are key parts of the energy projects.
The Finance Ministry has sent a formal letter to the Chinese Finance Ministry asking for the soft loan this week as the project requires huge investment, the government alone cannot fund it and seeks aid from the Chinese government.
CWE Investment – one of the China's largest hydropower developers – has agreed to develop West Seti Hydropower Project that is estimated to cost $2 billion. Nepal and CWE – a subsidiary of power developer China Three Gorges Corporation – also had signed a memorandum of understanding on August 27, 2012. The memorandum had stated that the project will be completed by 2019.
Likewise, the Exim Bank of China had also agreed to offer soft and commercial loans worth $1.6 billion for the construction of West Seti hydel project.