Upper Trishuli hydro deal to close in October
Sponsors of the $647 million 216MW Upper Trishuli hydropower project in Nepal - Korea South-East Power (50%), Daelim Industrial (15%), Kyeryong Construction Industrial (10%), IFC (15%), and Bkesh Pradhananag (10%) – are expected to reach full financial close on $453 million ECA/DFI-backed debt package to fund the scheme by October this year. The deal signed on 28 October 2019.
Sponsored via SPV Nepal Water and Energy Development (NWEDC), the financing has been held up as Nepal’s central bank approval process of the signed documentation has not yet taken place, with a source close to the deal claiming this process can take many months. Likewise, equity contributions are still being worked on as the original landowners impacted by the construction of the plants will gain equity exposure to the project through a holding company.
The 15-year door-to-door facility (inclusive of a five year-construction period) comprises a $30 million loan provided by ADB, a $90 million tranche put up by AIIB, a $30 million facility provided by Canadian Climate Fund for the Private Sector in Asia II (administered by ADB), a $35 million loan funded by FMO, IFC provided a $90 million tranche, Proparco funded $10 million, and OPIC and Korean Development Bank (KDB) provided $15 million and $30 million respectively.
Korean ECA K-Sure is insuring the KDB tranche, however the percentage of cover is not clear. IFC is also providing a concessional loan product, described as a quasi-mezzanine facility, to increase the comfort level of senior lenders, such as AIIB. DEG was initially tipped to join the lender line-up, however the German DFI did not take part in the financing.
