IANS: The Asian Development Bank will fund $120 million towards Bhutan’s 118 MW Nikachu hydropower project, whose total estimated project cost is $200 million dollars.
The project is modelled on public-private partnership (PPP) lines, with Druk Green Power Corporation (DGPC), and the debt to equity ratio of 65:35.
Nikachu is the second project to be built as a PPP after Dagachu project, which is due for commissioning by end of September.
However, ADB will provide 95 million dollars of the total 130 million dollars debt portion and 25 million dollars of the equity portion (70 million dollars). The remaining amount will be raised from other investors, including DGPC.
Of the total ADB funding, $25 million is provided as a grant, $75 million is a loan from ADB’s ordinary capital resource (OCR) with three percent interest, and another $25 million loan is from the Asian Development Fund with one percent interest during the grace period of eight years, Bhutan’s national newspaper Kuensel reported.
The vice president of ADB for south, central and west Asia, Wencai Zhang, who is in Bhutan, said: “Energy was one of the major priority areas identified during his meeting with senior government officials in the last few days”.
“For the Nikachu project,” he said, “ADB would not only co-finance, but also help bring in investment from the private sector.”
Started in year 2010, ‘Climate Himalaya’ initiative has been working on Mountains and Climate linked issues in the Himalayan region of South Asia. In the last five years this knowledge sharing portal has become one of the important references for the governments, research institutions, civil society groups and international agencies, those have work and interest in the Himalayas. The Climate Himalaya team innovates on knowledge sharing, capacity building and climatic adaptation aspects in its focus countries like Bhutan, India, Nepal and Pakistan. Climate Himalaya’s thematic areas of work are mountain ecosystem, water, forest and livelihood. Read>>