Nepal seeks $400m loan from China to fund transmission project

The Nepali government has requested a soft loan worth 400 million U.S. dollars from the Chinese government for the construction of transmission lines for the 750 MW West Seti Hydropower Project that a Chinese firm is developing in Western rural Nepal, officials said Friday. The Investment Board of Nepal (IBN) said the request was made as per the Chinese government's interest to fund hydropower project in Nepal. "The Finance Ministry has sent a formal letter to its Chinese counterpart asking for the soft loan earlier this week," Mukunda Poudel, a high level official at IBN told Xinhua on Friday. He also said as the project requires huge investment, the government sought aid from the Chinese government. CWE Investment, a subsidiary of power developer China Three Gorges Corporation (CTGC), one of China's largest hydropower developers, has agreed to develop the West Seti Hydropower Project in power hunger Nepal as a symbol of Nepal-China friendship. The two sides have also signed a memorandum of understanding ( MoU) on Aug. 27, 2012, agreeing to complete the project by 2019. The project to be developed under the financial and technical assistance of the Chinese government is expected to cost a total of 2 billion U.S. dollars. The Exim Bank of China has already agreed to offer soft and commercial loans worth 1.6 billion U.S. dollars for the construction of the project. During the first half of the current fiscal year, the Chinese government has committed a total of 68.4 million U.S. dollars assistance to Nepal under grant and soft loan during the first half of the current fiscal year.