The Export-Import (Exim) Bank of China has renewed the grace period of the loan provided to Upper Trishuli 3A Hydroelectric Project by four-and-a-half years.
The state-owned bank of China has written to the Ministry of Finance to officially inform about extension of the grace period. The renewal of the grace period, which had expired more than a year ago, implies the country can start repaying the due credit from 2021, according to a highly-placed source at the Finance Ministry.
Nepal Electricity Authority (NEA), which is building the 60MW project located in Rasuwa and Nuwakot districts through a subsidiary company, had previously asked the Chinese bank to extend the loan grace period by five years. The request was made following expiry of the grace period in August 2016.
The state-owned power utility had sought extension after the hydroelectric project was hit by devastating earthquakes of April and May 2015, which completed halted construction works.
The Chinese bank, in 2011, had extended a concessional loan of $114.7 million at an annual interest rate of 1.75 percent for 25 years, with a grace period of five years. As the grace period of the loan expired in August 2016, the bank wrote to the Finance Ministry and NEA requesting commencement in payment of instalment on a timely basis.
In response, the ministry asked for an extension of the grace period stating the construction of the project had been stalled by natural disasters. The Chinese bank finally made the decision to extend the grace period a year after the Finance Ministry made the formal request.
Recently, China Gezhouba Group Company (CGGC), the project contractor, resumed construction works at the project site. On Thursday, the project achieved an important milestone with the completion of excavation of 4.1-km headrace tunnel.
“With this breakthrough, around 85 percent of the project’s civil work has been completed. We are on track to meet the April 2019 project completion deadline,” said Ambikesh Jha, NEA appointed site in-charge of the project. “Now, the contractor will concentrate on construction of the project’s powerhouse.”
Currently, a technical team of the Nepal Army is carrying out repair works at the landslide-affected areas near the place where the dam of the project is being built. The earthquake-triggered landslides had affected areas close to the dam site, posing a threat to safety of workers. The army team has almost completed shotcreting the hill that lies on the right-side of the dam.
Shotcreting is the process of spraying concrete throughout the surface of hills to avert landslides. In order to prevent landslides, the army is also building fences with a special type of wire. Lately, the army has also repaired various sections of the access road damaged by earthquakes.