NMB Bank Spearheads Rs. 44.55 Billion Financing for Nepal's Largest Private Sector Hydropower Project

NMB Bank Limited has taken a pivotal role as the lead financier for the ambitious 440 MW Tila-1 Hydropower Project, a landmark initiative poised to significantly bolster Nepal's energy capacity. This monumental project, situated along the Tila River in the remote Kalikot district, is being developed by S.C. Power Company Pvt. Ltd. and represents a substantial leap forward in the nation's private sector-led energy development.

The Tila-1 Hydropower Project carries an estimated total cost of Rs. 59.4 billion, a testament to its scale and strategic importance. Of this considerable sum, a robust consortium of banks and financial institutions, spearheaded by NMB Bank, has committed to providing Rs. 44.55 billion in financing. This substantial financial backing underscores the confidence of the Nepali banking sector in the project's viability and its potential to contribute to national development.

NMB Bank's leadership in this financing arrangement is complemented by the strong participation of other prominent financial institutions. Global IME Bank Limited, Himalayan Bank Limited, and Prabhu Bank Limited have joined as Co-Lead Banks, forming a formidable alliance to ensure the project's financial stability. Additionally, several other banks and financial institutions will participate as member lending institutions, pooling resources and expertise to support what is currently described as the largest hydropower project in Nepal in terms of installed capacity to date, developed under private-sector investment. The formal financing agreement was recently solidified through the signatures of Dinesh Dulal, Assistant General Manager of NMB Bank, and Sushant Karmacharya, Chairman of S.C. Power Company, marking a critical milestone for the project.

With an impressive installed capacity of 440 MW, the Tila-1 project is slated to commence commercial operations by Poush 15, 2087 BS, as outlined in its Power Purchase Agreement (PPA). Upon completion, this project is projected to generate approximately Rs. 11.4 billion in revenue during its inaugural year of operation, promising significant returns and contributing substantially to the national grid. Such large-scale projects are crucial for Nepal, a nation rich in hydropower potential, as they move towards achieving energy self-sufficiency and potentially becoming an energy exporter in the region. The development of Tila-1 will not only address the growing domestic energy demand but also create numerous employment opportunities, foster local infrastructure development, and stimulate economic activity in the Kalikot region.

NMB Bank's involvement in the Tila-1 project is deeply rooted in its commitment to responsible and sustainable investment practices. The bank has consistently prioritized environmental and social considerations, implementing robust policies and management systems that align with the Environmental and Social Risk Management (ESRM) Guidelines issued by Nepal Rastra Bank. This dedication extends to its assessment of the Tila-1 project, where the bank utilized the Hydroselect Tool. This innovative tool, an initial environmental, social, and governance (ESG) screening mechanism developed by the Hydropower Sustainability Alliance (HSA), ensures that the project adheres to international good practices and minimizes its ecological footprint while maximizing social benefits. NMB Bank's extensive experience in the hydropower sector, with investments in over 50 projects to date, further solidifies its position as a leading financier in Nepal's green energy transition.

This landmark financing deal for the Tila-1 Hydropower Project not only highlights NMB Bank's strategic vision and financial prowess but also underscores the collaborative spirit within Nepal's banking sector to support national development priorities. As Nepal continues to harness its vast hydropower resources, projects like Tila-1 are instrumental in shaping a sustainable and prosperous energy future for the nation. The successful execution of such mega-projects, backed by strong financial institutions and guided by sustainable principles, will undoubtedly pave the way for further investment and growth in Nepal's vital energy sector. The bank currently extends its comprehensive banking services through an extensive network of 197 branches, 176 ATMs, and nine extension counters across Nepal, ensuring broad accessibility and support for its diverse clientele and national development initiatives.