Investment Agreement Finalized for 420 MW Tila-2 Hydropower Project
An investment agreement has been finalized with banks and financial institutions for the 420 megawatt (MW) Tila-2 Hydropower Project, promoted by Urja Tila Power Company. Located in Kalikot, this run-of-river project with a pondage facility involves a total cost of NPR 7.007 billion, of which 75 percent will be financed through loans. The project aims to contribute 2,318.79 gigawatt-hours (GWh) of electricity annually to the national grid, with a peak generation capacity of six hours per day during dry seasons.
Kathmandu, 18 August – Urja Tila Power Company has signed an investment agreement led by Everest Bank Limited alongside various other banks and financial institutions for the 420 MW Tila-2 Hydropower Project. Sanima Bank is the co-lead bank in the consortium, with Prime Commercial Bank, NIC Asia Bank, and Global IME Bank also serving as co-lead banks. Participating banks include Siddhartha Bank, Nabil Bank, Nepal Infrastructure Bank, Agricultural Development Bank, Muktinath Development Bank, and Kamana Sewa Development Bank.
Constructed in Kalikot district of Karnali Province, the project will see the dam established in Tilagupha Municipality, and the powerhouse set up in Khandachakra Municipality. This run-of-river project with piped roof-return type pondage is designed to operate with a daily peak generation of up to six hours during dry periods. The total project cost stands at NPR 7.007 billion, with NPR 5.255 billion (75%) secured as loans from banks and financial institutions, and the remaining NPR 1.752 billion (25%) funded through equity. The company has also allocated 20 percent of the shares to residents of the affected areas and the general public.
The project received the electricity production license from the Department of Electricity Development on 23 August 2018 (7 Bhadra 2075 BS) and signed a Power Purchase Agreement (PPA) on 23 November 2021 (7 Kartik 2078 BS) with Nepal Electricity Authority for 296.74 MW capacity. Construction is targeted to be completed within four years. Upon becoming operational, the project will generate a total of 2,318.79 GWh annually, including 451.05 GWh during peak hours in dry seasons, 205.45 GWh during off-peak hours, and 1,662.29 GWh during the monsoon season, feeding this electricity into the national transmission system.
With the signing of the investment agreement, a major phase of financial arrangements for the project has been completed. The project is expected to strengthen the national electricity system by providing power during high demand periods. The key promoters include Stream Investment, Energy Impact Fund, Robbins USA, along with other institutional and individual investors.