Nepali Group Acquires Dudh Koshi Hydropower Project from Indian Promoter

The 70 MW Dudh Koshi-2 (Jaleshwar) Hydropower Project in Solukhumbu has officially come under Nepali ownership after being acquired from its Indian promoter.

The project, originally held entirely by India’s M/S Dudh Koshi Hydropower Nepal Pvt. Ltd., is sold to a consortium that includes High Himalaya  Hydro Construction Pvt. Ltd., Puwakhola-1 Hydropower Ltd., and Aayu Malun Hydropower Pvt. Ltd., along with other energy and construction-related companies.

According to Puwakhola-1’s Managing Director, Kadam KC, the ownership transfer was finalized just a week ago. While financial details of the acquisition remain undisclosed under the purchase agreement, he confirmed that the Indian company exited after being unable to mobilize required funding. The project license had been secured on September 23, 2020.

The new promoter group plans to complete financial closure within September and begin construction in November. For this, it is raising Rs 10.5 billion in long-term debt, supported by a credit rating conducted through ICRA Nepal.

The financing structure is set at a 70:30 debt-to-equity ratio, with the estimated to cost of the project at Rs 15 billion in total. This means Rs 10.5 billion will be debt financing, while Rs 4.5 billion will come from equity. Laxmi Sunrise Bank will lead the lending consortium, joined by Everest Bank, Sanima Bank, and NIC Asia Bank.

In November 22, 2021, the Indian promoter had signed a long-term Power Purchase Agreement (PPA) with the Nepal Electricity Authority (NEA). The contract allows electricity sales for 30 years or until the license expires.

The PPA fixes seasonal tariff rates at Rs. 4.80 per kilowatt-hour during monsoon months (June–November), Rs. 8.40 during winter off hours (December–May), and between Rs. 8.50 to Rs 10.55 during evening peak hours (5 pm–10 pm). The agreement also includes a 3 percent annual escalation in rates for the first eight years.

Electricity generated will be evacuated through a 12 km, 132 kV transmission line connected to the operational Tingla substation, which the company believes will minimize risks of evacuation delays.

The project, designed as a peaking run-of-the-river scheme, allows up to six hours of peak-hour power generation during the dry season.