The Abu Dhabi Fund for Development (ADFD) has committed an investment of $30m to Nepal to finance the development of 140MW Tanahun hydropower project located near Damauli.
ADFD, a state-owned fund in United Arab Emirates, has told the Nepal government that it would allot the funds; however, it did not disclose the interest rate and maturity period of the loan.
Confirming the speculations, Ministry of Finance joint secretary Madhu Kumar Marasini was quoted by The Republic as saying that the ministry has received a letter from ADFD notifying the government that it approved the loan.
"However, meeting for further negotiations and signing of the loan agreement has not been fixed so far," noted Marasini.
"The loan agreement will be signed after a detailed discussion on the terms and conditions between the two parties."
Tanahun hydropower plant, meanwhile, is the second reservoir type project after Kulekhani plant, and has a capacity to store 295 million m3, along with an electricity generation capacity of 140mW.
Nepal government has secured a total $370m from three investor partners including $150m loan from Asian Development Bank (ADB), $150m from (Japan International Cooperation Agency) JICA and $70m from (European Investment Bank) EIB.
"The project is too important to us. The government will do its best to complete the project on time," added marasini.
Tanahun hydro project is expected to be concluded by 2020.